We've been there before. As leaders of a financial institution during the debt crisis in rural America, we watched land values race from $300 to $1,000 and then plummeted to $300. Lenders and borrowers faced a financial disaster. The regulators responded with a plethora of new policies, procedures and reporting requirements. Some made sense and were constructive and some felt like burdensome activities. That didn't matter. The crisis environment shifted the focus and balance of leaders decision processes.
To paraphrase an old cowboy phrase... "It is too late to close the barn door once the horses have gotten out." But still the door is closed, or maybe a new one is built. In the aftermath of the financial collapse in the U.S., there will undoubtedly be a flurry of new door closings. In "regulatory" speak, that means an explosion of new policies, procedures, and reporting requirements by many of the nation's regulatory agencies. It may be reasonable to expect the FDIC, OCC, SEC and others to develop new policies in response to the financial collapse. Most if not all citizens will be impacted directly or indirectly from new regulatory agency rules.
Regulators have a unique and important watchdog duty to protect citizens of the U.S. They are challenged to balance reasonable policies which create an environment for capitalism to thrive, presuming business and organizational leadership will act with honesty and integrity. When leadership fails, regulators are duty bound to respond as they deem necessary. That's where the country finds itself today.
Don't blame the regulator for reacting aggressively to the nation's current problems. In a free society, regulators are fundamentally a watchdog, providing the framework for leadership behavior. When leadership behavior fails as is the primary cause of the financial collapse, regulators may become watchdogs on steroids. A regulators concern is prevention of undesirable or unacceptable behavior so that citizens are protected. Most regulators usually have no duty, mandate or perhaps interest to help your business market, grow, prosper or help business manage through these tough times. That's the job of leadership.
Many business and organizational leaders have a gap leading in this new reality with limited experience facing cease and desist orders or memorandums of understanding...thus, may be unprepared how to lead their business in a new more regulated commerce. The challenge is daunting...inescapable if you want to lead...and can be wonderfully rewarding if you embrace new strategies. Responding to the new regulatory changes will take time to recover if the primary focus is response to new regulations. If leaders are driven by a fear, the organization will have new limitations to create hope.
Remain focused on your desired end result. Focusing primarily on regulatory compliance will likely delay your dreams and sidetrack the organization from your desired outcomes.
Here are 5 leadership strategies to thrive the impending regulatory explosion.
1. Be clear with what is going on in your business now. Is your business regulatory or customer driven.
2. Establish your cultural intentions of absolute honesty and integrity. The tsunami of distrust is casting a pall in the country. Regulators and citizens deserve and expect honesty. Make it a part of your culture. Compliance is a must...but avoid paralyzing the organization with all power and decision making driven by the fear of regulatory compliance.
3. Balance the organizations focus. Successful leaders need the courage and clarity to balance a regulatory driven agenda with the business needs of growth, prosperity, creating successful clients and providing a great place to work. Marketing, client and employee satisfaction need even more attention and focus. A leader's duty of hope is a calling to balance the focus of the organization. A leaders choice is to create a regulatory driven organization or a customer driven organization. One sucks energy from people, the other creates energy in people.
4. Focus on your top 3 business and marketing objectives and your top 3 regulatory focus areas. The rules of engagement have changed. Assess, clarify, and balance the needs of clients, employees and regulators so that your culture becomes your asset in these tough times. Marketing should always be 51% of the leadership focus. Focus on the critical few objectives, not the insignificant many.
5. Communicate and reinforce vigorously your top focus areas. Employees and clients will find hope in your clarity, courage and consistency of focus. The clarity and focus are bedrock to a balanced culture so that you adjust to the new reality.
Interesting times....perhaps, a clarion call for "Elegant Courage"!
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