top of page

How to Kaizen Your Annual Compliance Program Review

Writer's picture: Lee NelsonLee Nelson
"Kaizen"

You may be aware of the Japanese business philosophy of Kaizen or "continuous improvement,” which focuses on making ongoing, incremental improvements to internal processes to create efficiencies and encourage employee engagement.


You are likely much more familiar with your organization’s annual compliance program review process, which may be kicking off at the start of the new calendar year with the usual objective of ensuring the program is effectively mitigating risks, understood by management and employees, and aligned with current laws, industry standards and best practices.  The scope of the review likely encompasses all elements of your program from policies and procedures, to training and awareness efforts, monitoring and auditing processes, reporting mechanisms, and enforcement measures.


That’s a lot, and it’s important to get it right. So it is worth considering whether Kaizen principles can be applied to the review process to ensure it is as effective, systematic, and collaborative as possible. Here are some suggestions:


1. Emphasize Continuous, Incremental Improvement


A fundamental Kaizen principle is that improvement is an ongoing process, achieved through small, consistent changes rather than major, disruptive overhauls. Treat the annual review a continuous feedback loop that identifies and addresses smaller compliance issues throughout the year rather than as a one-time event. For example, use data from interim audits, employee feedback, and risk assessments to inform the annual review and track incremental progress year-over-year.


2. Engage Employees at All Levels


Improvement relies on contributions from everyone in the organization no matter their level or role. Use surveys, focus groups, or interviews to gather input on how compliance policies are perceived and implemented in practice. Empower stakeholders by encouraging them to share suggestions about compliance challenges or inefficiencies they have experienced. Acting on constructive feedback from employees and management will build trust and encourage everyone’s continued participation.


3. Focus on Processes


Focus on refining processes rather than assigning blame to particular departments or individuals. Process-mapping techniques can help to evaluate the effectiveness of compliance procedures, including training, reporting, or investigations. Look for inefficiencies, redundancies, or unclear steps in workflows such as reporting mechanisms. Ensuring that any updated processes are well-documented will help to reduce confusion about who does what and in what order.


4. Also Focus on Metrics and Measurement


Improvements should be measurable and tracked over a period of time. Develop key performance indicators (KPIs) for compliance, such as tracking (a) the percentage of employees completing training on time, (b) number of compliance-related incidents reported and resolved, or (c) employee awareness levels (using surveys – anonymous to encourage participation).  Compare these metrics over time to track progress and highlight areas needing attention.


5. Eliminate Waste (Muda) in your Program Review Process


Wasteful activities and inefficiencies can hinder progress and should be minimized. This is the ‘muda’ principle and it is too often overlooked. Streamline the program review process by: (a) avoiding unnecessary meetings, (b) using data analytics to identify trends and risks rather than manually reviewing all incidents, (c) focus the review on high-impact areas, such as recurring compliance issues or critical risk areas, and upcoming new risks, and (d) document lessons learned and share them to avoid reinventing the wheel each year.


6. Conduct Regular Small Reviews


Small, frequent evaluations are more effective than a single large assessment. Break the annual review into quarterly or biannual small reviews that focus on specific aspects of the compliance program such as training effectiveness or whistleblower hotline usage. Use these small reviews to identify and address emerging issues, ideally reducing the burden of the year-end review.


Incorporating these Kaizen principles into your program review should strengthen your organization’s compliance program by helping to foster a culture of continuous improvement, engagement, and proactive risk management.



General Counsel, Room to Read

!

Subscribe to BriberyMatters

Subscribe to receive the latest BriberyMatters blog posts straight to your inbox. Enter your email address below:

Thanks for subscribing!

bottom of page