Saturday, December 07, 2013

Doing (the Right) Thing (Right)

With the plethora of changes in the US system (Affordable Care, Blizzard of regulatory changes) it is becoming increasingly difficult for organizations to navigate their way through the myriad of changes. If the pressure for compliance is not enough, the economic pressures of competitors and the demands of stakeholders have pushed many organizations beyond the boiling point. Regardless of the industry, organizations currently face increasingly strict operating environments.

It was the November 2013 article by Josh Hyatt Raising the Standard of Compliance that afforded me the glimpse of what large multi-national public companies are facing. Up to this point, I felt the rain of compliance requirements in medium sized single industry organizations. Trying to get my head around the, what appears to be, the dichotomy between business success and compliance. My initial perspective, like that of others was, ‘another thing that must be done’.

The Hyatt article reviewed data of 150 senior executives of organizations whose revenue was at least $100 million per year. The data revealed that 81% of respondents that the task of monitoring tax and employment related changes had become much more time consuming. Supported by deductive reasoning, 92% of these executives indicated that their budgetary cost of compliance will increase over the coming year.
For many, personally and corporately, the response to the compliance demands of external agencies are met with ‘we will simply pay the penalty’. Hovering under the guise of ‘wait and see’, for many is par for the course. However, when it rains it pours! The wait and see model may work for a time, but when the agency percolates to the top of some list for investigation, and the investigation yields fruit – it become a call to the wild for a feeding frenzy!

The roulette wheel of ‘wait and see’ is not a long term strategy for any organization. In the same vein, organizations are being pulled by many fires and the compliance fire may only be smoke at the current moment. Juggling one more external demand causes executives to ponder ‘ doing things right vs. doing the right thing’. Through the ebbs and flows of current economics has brought me to the very question many times.

Doing things right vs. doing the right thing may, be to the literary aficionado the power of the placement of an adjective; in business circles has led to tremendous debate. There appears to be no end to the commentary on this powerful phrase when an internet search returns an immediate 431,000 hits in little over 2 seconds. At the highest level, Peter Drucker says “Management is doing things right; leadership is doing the right things.”

Unpacking the statement, I guess, suggests that ‘the right things’ are tied to those things that bring ‘good’- however we choose to define good. While ‘thing right’ relates more to the how individual steps are made toward the fulfillment of the ‘right thing’. This notion is supported by John Tabita in Doing Things Right vs. Doing the Right Things, where he contends that this phrase is the difference between leadership and management.

Tabit builds on the notion that ‘doing the right thing’ relies on strategic thinking that is meant to build vision. While ‘doing things right’ is more of a tactical pursuit. Although Tabit continues the strategic vs tactical debate he never clearly makes the point that strategy and tactical response must be tightly coupled.
Probably the best article on addressing ‘doing the right thing vs doing things right’ was by David Anderson, Why “doing things right” should lead “doing the right thing”. Anderson begins with the neuro-psychological basis of ‘trust’. Trust in predictability and quality are the keys to enabling deferred commitment. When there is no trust and no underlying capability to make real options valuable, there is a tendency to compensate with early commitment and over-burdening of a system. When users cannot expect a consistent or quality deliverable, they question on the validity of the output to meet their needs. Regulatory systems provide the mechanism to instantiate ‘trust’ in the deliverable.

Although many organizations see regulatory issues as the ‘ball and chains’ they do create trust with the end user which will create the end result of user commitment. This is the first step in building a solid organization. Management must use the ‘doing the right thing’ to make the organization successful – Drucker and leadership.

"Doing things right" must lead "doing the right thing" to enable a virtuous cycle of continuous improvement. Management must stop trying to solve one challenge at a time but rather take a more holistic view toward achieving the best achievable cost advantage.

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