What is the one thing that legal and compliance teams hate about innovation teams? Being treated like a box to tick at the end of the innovation process. They really hate it when innovation teams come to them towards the end of their projects, asking them to approve something they have not seen until that moment. A lot of innovation teams I work with, try as much as they can to avoid legal and compliance, until they can’t avoid it anymore.
This is the wrong approach to take. In one company I worked with, innovation teams complained a lot about how long legal and compliance took to approve their projects. But the time that is taken makes sense if we consider that the legal and compliance teams are just seeing the project for the first time. They probably have a lot of things to figure out about the project before they approve it. They are not trying to stifle innovation. It is the innovation teams that stifled their own progress by engaging with legal and compliance late in their projects.
I have made that mistake myself in the past. I was once engaged in a corporate innovation training program that focused on supporting teams that were working on actual projects that were intended for launch. During the training, we covered four topics, value proposition design, business model design, hypotheses mapping and experiment design. Every fortnight, we would cover one topic and then give the teams a few days to work on their own project.
Our idea was that we would bring in Legal and Compliance for a separate workshop that we would host after the hypothesis mapping process, but before the teams designed their experiments. Our thesis was that we would train legal and compliance so that it would be easier for the innovation teams to get their experiments approved, once they were ready to run them.
We were wrong in this approach and a leader within the legal and compliance team did not hesitate to show us the error of our ways. She pointed out that it was wrong of us to assume that the best time to engage with legal and compliance was when teams were ready to run experiments. She patiently explained that innovation teams should engage with them at the beginning of their projects, during the value proposition and business model design.
This early stage engagement provides the legal and compliance teams an understanding of what the teams are actually working on. This understanding allows the legal and compliance team to start thinking in advance about how to support the innovators. This early engagement helps to make the approvals process go quicker in the future. The legal and compliance team reminded us that their role was not to be a roadblock to innovation, but to support teams in figuring the best ways to test their ideas in a legally compliant way.
Aligning On Innovation Process
In another context, I was working with a company in the finance sector. In this industry, compliance with regulations is really important. As such, we spent time working to align with legal and compliance on the innovation process we wanted to use. Over a series of workshops, we developed an understanding of the requirements that legal and compliance needed before a product was taken to scale. We then worked through how those requirements could be adjusted based on the innovation stage of a product. The goal was to achieve a legal and compliance process where the requirements were lighter for early stage products but then got heavier as the teams made progress towards full scale launch.
After the workshop and a successful framework design, the Chief Legal Counsel indicated how pleased he was that their team had been invited into the innovation process. He remarked how dismayed he had been that his team was treated like something to avoid until the last minute. At that moment, they are then treated like a simple tick box exercise. He was grateful that our framework was designed to involve his team in innovation projects at an early stage.
Innovators Have To Collaborate With Key Functions
Innovation succeeds when there is good collaboration between the innovation teams and key functions within the business. It is wrong for innovation teams to avoid any contact with these key functions until their ideas are ready for launch. These functions are not going to simply sign off on your idea once it’s ready. If the goal is to scale our innovations in the market, then collaborating with legal and compliance early and often cannot be avoided. Indeed, starting engagement early will help with faster approvals in the future.