Once you have created a framework to help manage your risk of corruption, you need to ensure that you have a strategy in place to roll it out, a system to avoid errors creeping into your framework, and a clear ROI in place. Our latest article looks at all of the above, in order to ensure your new framework yields the maximum results.
Getting the strategy right
Knowing your risks is one thing, having a strategy in place to ensure they do not occur, is something else entirely. It is key to ensure you have the right strategy in place:
- Prioritise your risk: Using the knowledge you now have of your business, identify and rank the areas of your business that hold the highest risk factors. Prioritise the highest risks and focus on them first.
- Use the data you have: This could come from your personnel system or your compliance system, which could be beneficial in helping evaluate the risks to your company. The key is to start with what you have on hand. You can always add to your framework later and improve/adapt your learnings accordingly.
- Plan your meetings: Schedule time with the executives, managers whose approvals will be needed, compliance and risk team members and any necessary support staff. Meetings you will need to schedule in advance:
- Goal meeting
- Framework outputs and area to apply within the business
- Analysis of data and wire framework straw model evaluation.
- Framework refinement meeting
- Results analysis and refinement meeting
- Start at the top: Starting the framework with the executive management provides the confidence to the organisation that what you are doing is fair, transparent and applied to all without fear or favour. The executive is also a small enough group to enable you to use it as your ‘trial’ or ‘pilot’ project.
- Communicate and explain:
Communicating clear, concise reasoning for the framework will build trust among your staff that it is not aimed at getting rid of people, but rather to protect and grow the business.
Involved HR and legal from the start and reward for maintaining or improving their integrity score – it’s easier and a lot cheaper than the alternative.
- Share your findings: Release the findings from the ‘pilot’ you ran with your executive, before running an actual pilot and then a larger roll-out. This transparency will create further trust in the system from the outset.
- Run a real pilot: Following the executive ‘pilot’, use those results to commence a pilot in a section of the organisation that is a priority for you.
- Expand the framework: Once you have implemented the framework in your company, it will be time to expand the framework to your key suppliers and or customers. It’s best to start with the material relationships; the twenty percent of the relationships that generate 80% of your value.
Avoiding errors creeping in
When rolling out a new framework, there are bound to be some teething issues, from negative feedback to missed opportunities, but the key is to avoid a full-blown breakdown when introducing your module throughout the company. Below are some ways of ensuring you don’t go down this road.
- Assume nothing: You may believe you know all the risks confronting your business, but it is key to engage with your employees, suppliers and customers to ensure nothing falls through the cracks. Run surveys with employees, suppliers and customer, engage on social media, leave no stone unturned.
- Embrace the feedback: Don’t ignore negative feedback. Bad news travels fast and you need to ensure that you are aware of any poor reviews so that you can act fast in analysing the information at hand, reviewing your framework and assessing the correct response.
- Keep the data fresh: You need to ensure your remains up to date. What you relied upon in the past may no longer be relevant and the need for continual evaluation is critical. We recommend a monthly update or at a minimum, quarterly.
- Ignoring the emotional drivers of choice: People respond better to positive reinforcement than to punishment, with 90% of people driven by emotion. With this in mind, you should aim to be tapping into a positive mindset, with your motivations all aimed at creating trust and fostering lasting relationships.
- Forgetting to update and improve: Make frequent reviews a priority, starting with monthly reviews, and then allowing for larger intervals later on, while the board should be reviewing your framework every six months. Your improvements will enable you to consistently offer a better product and have a better understanding of what is happening within the business.
- Do not over-promise and under-deliver:
When you make promises you are not certain you can deliver upon, you put yourself and your framework model that you have developed into an untrusted category or in a risky position.
By attempting to roll out a product that does not work yet is risky business. The same can be said if you launch or before you have worked out all the details and bugs for execution. Either of these scenarios will set your users/employees up for a bad experience with your organisation and with the framework. Either way you lose trust as well as the benefits of your framework model. Ultimately, all your hard work ends up being for nought.
- Trust the results: You need to trust your system. It is easy to disregard an irate employee or consumer, but you need to take the high road and let them feel valued. You may have to make tough decisions on rare occasions, because of the results of the framework, but that is what it is designed to do: protect you from harm and loss.
Establishing your ROI
There are two ways to develop an ROI.
- Dividing the revenue that you can measure to the cost of your framework model and its program;
- Determine the incremental costs of specific interventions of the framework for tenders, customers and suppliers against those platform costs.
Either way, your framework model should provide you with meaningful data that helps you grow relationships that deliver value for all and not just for a select few.
Know your allowable acquisition cost
Knowing how much it costs for you to implement a framework model is important for any compliance officer, regardless of the sise of the business, because it directly impacts your target ROI.
Establish benchmarks
Establish benchmarks from the data in your framework model that demonstrates the reduction in time or cost to:
- Evaluate candidate employees
- Reduction in disciplinary hearings
- Reduction in forensic investigations
- Reduction in regulatory risks
- Reduction in supply chain costs
- Increase in business acquisition
- Brand awareness and growth
- Media and brand exposure.
- Reduction in the complexity of compliance systems
- Reduction in the number of compliance failures.
Adjust your benchmarks
Once you start getting real data from actual systems and you are confident of their reliability, begin to adjust your estimates and re-run scenarios from your earlier forecasts. Make appropriate adjustments to your assumptions so you can launch new versions of your results that can help you forecast and predict risk events in advance.
Avoid the dashboard trap
Just because your dashboard or central location for viewing all the data points simultaneously can measure everything, it does not mean it should.
Don’t become obsessed with the numbers. Apply your focus to the areas that need to be improved and where you need to make decision to improve your scores. A carefully thought-out measurement plan, tied directly to your goals, should be the only actionable information to drive decisions.
The framework explained
Putting together a working detection and prevention framework is the first step in safeguarding your business against corruption. We have previously provided a summary of our framework model, which has been used by organisations in South Africa. This should help you better understand how it can help simplify your task in preventing corruption from damaging your business. To revisit this article, click HERE.
How risk-scoring models help your business
The people you employ are critical to your business. Ensuring that you have the right people, in the right positions throughout your organisation is critically important to its success and sustainability. Maximizing the effectiveness of the tools you use to ensure you select the right people is just as essential. Find out how risk-scoring models help your business HERE.
Protect Yourself
Corporate Insights has developed a one-of-a-kind modular system that combines TransUnion’s big data universe with our own artificial intelligence and smart logic algorithms. It enables you to continually monitor, detect, act on, and prevent critical risks, both internally and externally.
The Corporate Insights system will allow you to protect your business from succumbing to the typical pitfalls that lead to corruption. It also comes with a host of additional benefits to ensure your company continues to operate optimally, free of the threat of corruption.
Click here to book a demonstration or call us today to find out how you can transform your business.