Can Innovation In Regulation Improve Productivity?

Some may think that putting ‘regulation’ and ‘innovation’ in the same sentence is an oxymoron. Surveys across businesses - large, medium, small and irrespective of industry – continually show that regulation is top of the list as a major barrier to improved productivity. Innovation is possible and is a key driver of productivity. Much of the focus to date has been on policy. Good policy is the foundation of good regulation. Innovation is needed in the area of policy but the interdependencies and spider web of interests are so complex as to suggest that traction will take longer.

Regulation and innovation

The need for ‘regulation’ arises from a proven case that people need to behave differently or businesses need to operate differently. A broader definition of regulation is “the sustained and focused attempt to alter behaviour of others according to defined standards or purposes with the intention of producing a broadly identified outcome or outcomes”. The importance of this definition is that it encourages us to look more broadly for the appropriate methods and tools for modifying behaviour. Innovation can be incremental, transformative or disruptive and can apply to anything from the whole of an organisation or system of any kind to an individual process. Innovation can be in respect of organisational structure, products, operations, services, people, etc.

Innovation in the context of regulation and the regulatory system

The concept of regulation, its goals and the complex web of stakeholders (both active and passive) make it a minefield when contemplating innovation. Notwithstanding this, transformative innovation can be achieved by having the appropriate leadership, environment, knowledge and structure.

There are a number of pieces to innovation of the regulatory system and regulatory change jigsaw.

GRC professionals have a significant advantage. People innovate and GRC professionals are well positioned to pursue innovation at all levels – whether it be incremental, transformative or disruptive – and there are manifest benefits for doing so. Once policy is developed and incorporated in some form of regulation, most of the costs are incurred and the impact on productivity is ‘on the ground’ within organisations and in the marketplace in which those organisations compete.

Within any organisation – large or small – the GRC function has an unprecedented view of the business and how the business operates and there is increasing recognition of the strategic ‘all of business’ importance of the GRC function. Even in an organisation where there is no overt GRC function, there will be someone who bears these responsibilities, irrespective of their title.

Incremental innovation is possible

Whilst the following list is not exhaustive, significant incremental innovation is possible by addressing:

  • The unique nature of regulatory projects
  • The need for a bespoke regulatory
  • Methodology
  • Funding
  • Ownership
  • Resourcing
  • Timing
  • Governance

Compliance and risk training solutions by the GRC Institute

As a registered training organisation (RTO), the GRC Institute offers two nationally accredited compliance and training solutions courses. We also provide an introductory workshop in compliance and risk for those new to the profession or for HR/learning development professionals looking for an induction program for new staff.

Compliance and Risk 101 introductory workshop for new staff

This is an introduction to efficiency, with each compliance and risk training solution tailored for those in need of new strategies and frameworks. It highlights the international compliance standard ISO 19600 and the international risk management standard ISO 31000 as well as offers insights into reporting functions. Through this it allows companies to establish key frameworks, to manage their regulatory requirements and improving their environments. It also teaches members how to adapt to new responsibilities and develop proactive relationships. The need for compliance and risk training is undeniable – with increased regulatory requirements and media profile of breaches and unethical behaviours by organisations. Through our 101 course, however, members can create a foundational framework, and this can later be expanded through further education.

To request further information about an available compliance and risk training solution - contact us today on +61 (02) 9290 1788.