The Mindset of Navigating Industry Regulations

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“This might not be a sexy title,” a client said to me last week, “but ‘Navigating Industry Regulations’ might be a good topic for one of those blogs of yours.”

And while it’s true that thinking about regulations is a boat, plane, and horse ride journey from sexy, it’s also true that working within regulations is a common reality in some industries.

In this blog, I’d like to think about the mindset of working in a regulated environment; the impact regulations can have on leadership; and how we can create flexibility in our thinking as we navigate a regulated industry.

A Regulated Industry

But first, let’s be clear what we mean by regulations.

Industries like insurance, healthcare, banking, construction, and government services all sit within a maze of compliance and regulatory standards.

Those standards don’t sit still, and changes to regulations are in part what makes some regulated industries feel like they’re playing a constant (and stressful) game of catch-up. That’s understandable because the penalty for not following an industry’s regulations can mean anything from a slap on the wrist to a hefty fine.

Regulations might cover areas like how data is handled or security precautions. Compliance can take a lot of time and money. When the stakes are so high it makes sense that organizations want to get it right.

A Regulated Mindset

That “getting it right” is an important aspect of the regulated mindset. To comply with regulations means to follow a set of instructions. That’s obvious. But what’s less obvious is the impact following those instructions can have on our thinking process.

In many regulated industries, the impact I’ve seen of getting it right  is a willingness to replace our own thinking with the regulation. I know that’s happening when I hear comments like “We do it this way because of compliance issues”.

That, to me, is the effect compliance can have on our thinking. In its worst incarnation, regulation can stop our own thinking in its tracks. That happens because we start thinking there is no other option except how we’ve interpreted the regulation.

The most important words in that sentence are “no other option” and “interpreted”. That’s because when we think there are no other options, we stop looking for them. When we think our interpretation is accurate we don’t question it.

Leading in the Midst of Regulations

That’s a real problem if we’re leading in a regulated industry. If we see ourselves as being given instructions we need to work within, it means we’re not leading at all: we’re implementing how we interpret the regulation.

That may work for us if the regulation stands still (we’ll always know what to do and how to do it), but it’s less successful in a changing regulatory environment. When regulations change we find ourselves catching-up as we try to figure out what needs to change in our organizations to now be compliant.

But there is another way.

The What vs The How

And that other way begins with understanding that regulations don’t insist on a certain way of being compliant. In my experience, although a regulation will state what needs to happen to be compliant, it very rarely states the method you have to use to ensure compliance.

It’s telling you the end goal – the “what” – and it’s leaving it up to you as an organization to figure out the “how”. That’s our job as leaders in a regulated industry: to determine the most effective way for our organization to be compliant.

Genuine Curiosity

And we can do that using two attributes of a leadership mindset: genuine curiosity and flexibility of mind.

Genuine curiosity sees us being curious about what the regulation is trying to achieve. It’s like looking under the hood of the stated aim and trying to figure out the intention. Is it to safeguard data? Is it to protect the consumer from risk?

If we can look beyond the headline to truly understand what’s driving the regulation, now we’re in a good position to move onto flexibility of mind.

Flexibility of Mind

There’s always more than one way to do anything and that’s just as true of being compliant.

Applying flexibility of mind to compliance means more than just finding different ways. It means using the answers genuine curiosity throws up to consider how we can use compliance to our advantage. Can it help create trust in our customers? Can we go beyond stated regulations to distinguish ourselves from the competition? Can we use our understanding of the intent of regulations to plan for likely changes so we’re ahead of the curve?

Do that and now we’re building compliance into our business strategy.

Regulations: A Sandbox

My point here is that too often our thinking stops at the point regulations take over. Lead like that and our organizations can become rigid; and worse than that we can unintentionally cascade inflexiblity of mind.

But what if we saw regulations as more than something to implement? What if regulations were a process that defined the sandbox we can play in?

If we can think like that there’s room to lead. After all, what we do in the sandbox is still up to us.

 

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What to dive deeper?

Check out The Six Attributes of a Leadership Mindset by Joe Britto

 

curiosity, Flexible mindset, strategic thinking