by Andrew Leigh, Featured Contributor
If you don’t know where you want to go, any road will do”
– says a familiar Chinese saying. Relevant to so many situations, it’s a good way to show up lack of clarity about intentions.
CONSEQUENTLY, it’s hardly surprising the major consultancies view this terrain as fertile ground for 
promoting their services. The latest version of this comes from KPMG, which in a new report it proposes the confusion of regulatory compliance facing so many companies across so many industries is:
“..An opportunity to transform and catapult a company to a new level of competitive advantage” [1]
The possibility of transformation seems highly relevant to regulatory compliance by corporations—since there is continued confusion over objectives and ambitions. These leave many senior executives concerned and uncertain about how to navigate the best way forward.
An ever-changing regulatory landscape ensures even the most expensive compliance system is doomed to disappoint. No matter how big the compliance army, no matter how impressive the support system, compliance failures are bound to happen.
As this reality slowly sinks in, many powerful minds are focusing on what to do about it. One useful approach can be summed up as “Beyond Compliance.” This is the realisation that to keep a company—especially a large one—on the straight and narrow—much more than regulatory conformity will be needed.
Re-framing the problem in these terms is both ingenious and disingenuous
Ingenious, since KPMG can fairly call for firms to invest heavily in actions which will transform their businesses beyond compliance. However, in KPMG terms they will naturally need existing services such as tax know-how to develop their competitive advantage—territory familiar and comfortable for most big consultants.
Disingenuous, since one view of this line of reasoning is this is merely a highly sophisticated marketing ploy, re-packaging consultancy, rather than helping solve the problem facing companies around the compliance issue.
Behind all the jargon and buzz words lie the basic message, “you need us to help you make sense of this stuff.”
For example, to respond to the regulatory situation facing it, one US health care company saw the 
opportunity for transformation. It conducted some big data analysis to reveal price disparities charged across the same region. These presumably ran foul of the regulation, leading to re thinking its product profitability, pricing strategy, sales force performance, motivation and marketing relationships.
You can be sure none of this complicated chain of events happened without a consultancy input! KPMG puts its message across with brutal frankness, wrapped in the usual management speak. Explaining companies must be capable of analysing the new data beyond compliance, they must draw conclusions about how to improve business “based on this new, rich trove of information.
Such activity though requires “new capabilities, focus and commitment.” Who best to help with such a challenging task than a major consultancy?
But what if the task of transformation has little to do with big data? Not so much “motivating” others, as tapping into their basic integrity and commitment to help a company navigate the regulatory rapids.
This in turn does indeed imply a transformation, but one rather based on ethical leadership that really understands how to energise, inspire and win ethical engagement.
KMPG itself offers a good example of such a situation. For example, at a US electrical utility where regulations forced a re-think about the business, the transformation included asking employees for re-positioning ideas, and what they thought of the company culture.
They responded by saying they wanted less hierarchy and more collaborative working. In fact, they provided a whole stream of ideas of how to improve the business and by implications how to meet regulatory requirements along the way.
None of this implied a need for expensive consultancy. Rather it followed from a genuine management re-think of leadership behaviour.
While this report is inevitably rather self-serving, its basic message that going beyond compliance can transform a business remains well-founded.
Source:
1: Business Transformation and the Regulatory Environment, KPMG. 2014
