6 Results you will Achieve by Making Compliance a Primary Focus in your Business Strategy

Welcome to Penneo’s newsletter, where you'll find actionable advice to tackle the challenges faced by your business when it comes to data security & regulatory compliance.?

Today's read is ~5 minutes.

What you haven’t heard about compliance (and what you can gain from it)

Across industries, general frustration arises whenever there is a new compliance requirement or update, which tends to be seen as a restraint on entrepreneurial activity. Not because people are against doing business the right way - but because of the burden, time, cost, and distraction these things bring.?

What is most often not taken into consideration is that investing in compliance programs not only protects from risks but also can be a massive strategic advantage.

As challenging as it may be – when done well, compliance can be the start of an entirely new outlook on success

You can’t win the game if you don’t know the rules. An organization can’t flourish unless it keeps pace with regulatory changes and leverages what they offer.?

In the modern market, compliance opt-outs are not in the picture. Only if you understand the rules and respect them, can you aspire to play better than anyone else.

Compliance can keep a company on the right side of the law, but this is only the beginning

Nothing drives an organization to review and improve its practices like an upcoming audit or the possibility of a hefty fine. The costly consequences of business disruption can be very motivating as well.?

The most obvious compliance benefit is, of course, decreasing the risk of adverse legal action and financial penalties. While undeniably attention-getting, such a singular focus can be a poor incentive for influencing organizational behavior.?

Although the legal driver is critical, there should be more emphasis points when estimating the advantages of compliance-oriented changes. An equally compelling message that translates powerfully to management needs is that good compliance is good business.

How so?

Here are 6 results you will achieve by making compliance a primary focus area in your business strategy.?

1. Build customers' trust and establish brand loyalty

The success of a business depends on its public image.?

Failing to meet compliance obligations can jeopardize a company’s efforts to retain customers. It’s, therefore, no surprise that leaders consistently rank reputational risk as their number one worry.?

Given the strong correlation between high perceived transparency and positive consumer sentiment, corporate compliance can improve a company’s ethical posture and uphold a trustworthy image that earns customers’ lasting loyalty.

2. Improve Public Relations

Media scandals have shown that Warren Buffett was right in saying it takes 20 years to build a reputation and about five minutes to lose one. Misconduct can cause companies to suffer brutal consequences, starting from negative press attention and adverse public perception.?

On the contrary, a safe and reliable name is an excellent source of positive PR.?

Beyond making good business sense, this trust-building exercise demonstrates goodwill, corporate citizenship, and improved brand equity.

3. Optimize business processes and strategic decision-making

Compliance can serve as a powerful tool for long-term change to move faster and more confidently while also reducing bureaucratic costs.?

An organization that spends less time dealing with regulatory infractions has more resources to focus on initiatives that improve competitive positioning and help gain market share.?

Moreover, when a company is forced to accurate and timely documentation of activities, information assets are consolidated, categorized, and analyzed. This visibility and transparency uncover better data for better decisions - which is essential for planning informed investments and identifying emerging risks earlier.

4. Seize upon business opportunities starting with a level playing field

One benefit of industry-wide rules is a more level playing field where everyone has equal chances. What stands out and makes the difference are the quality of the products or services provided, the experience offered to the customer, and the value of the people behind them.?

Proper compliance programs make a business more attractive to potential partnerships and contract opportunities. We are all someone else’s third party: the more effective our ethics and compliance are, the lower the risk we pose to others.?

A good compliance record is an indicator of a well-run business and may influence its desirability as an investment.

5. Increase operational efficiency

Compliance has a profound impact on the business culture. The workforce must be involved and sensitized to key issues to improve overall security.?

Employees play a significant role in organization compliance and data protection, so they should follow policies and procedures that mirror the company’s legal obligations.?

When people have rules and know them, they will be less hesitant and more confident about doing their jobs. Having access to the right information at the right time also increases business efficiency.

6. Attract top talent and enhance employee retention

Job seekers look for companies that take ethics and compliance seriously. An effective compliance program helps attract and retain higher quality team members, with a lower cost of recruitment and churn rate and, of course, the priceless value of strong employee engagement.?

The same is true for current staff. The more people feel they work in a fair, professional, and safe environment, the more likely they will stay with the company. Improved employee morale, retention rates, and job satisfaction ultimately enhance productivity.

From a legal burden to a competitive differentiator: compliance as an opportunity

There is no one-size-fits-all management plan. A good program should be tailored to the individual company and identify the optimal marriage of compliance and business goals to produce successful results.?

But how can you make sure you have a strong compliance program in place??

We’ve outlined the 8 essential steps to creating an effective compliance program and helping you demonstrate that your business is aware of its legal obligations and takes all the necessary steps to comply with them.

In a nutshell: Look at the positives of compliance to strengthen your business and ensure its longevity. Protecting your company means no surprises and dramatically simplifies your daily business.

Thanks for reading!

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