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Running Experiments - Compliance

Lean Innovation: How to run experiments without compliance wanting to kill you

This article was co-written with Christopher Anderson, J.D. Chris was a Senior Product Manager at LexisNexis before founding his own firm and helped offer a firsthand account of fostering healthy collaboration between legal, product and innovation teams at LexisNexis when it comes to rapid experimentation.

Large successful organisations can’t turn into startups again. They shouldn’t. They have core business assets that generate billions of dollars.

Exposing those assets — brand, sales and distribution engines, proven products, operational excellence — to the chaotic environment of rapid experimentation and “failing fast” is a recipe for disaster.

These core assets must be protected. That is the role of legal, compliance, corporate marketing, IT and other functions. They act as antibodies, fighting of “viruses” that threaten the core business.

But that’s not the end of the story. These assets are optimised for executing in the known, well-understood markets that exist today; that existed yesterday. But with increasing volatility in the market, and industry disruption lurking around the corner, enterprises must also be able to innovate; they must be able to incorporate startup-like practicesin the face of uncertainty.

To the antibodies, innovation looks like a virus.

Innovation requires that people work differently, and different is bad. It requires people take risk, and fail, two things that typically go against the grain of corporate culture. We’ve seen the same story happen time and time again. An organisation begins to adopt lean startup and run rapid experiments.

Soon after, teams stop running experiments. Not because they don’t want to, or because they don’t see the value, but because they’re scared of butting heads with internal compliance teams.

In one Lean Enterprise Accelerator Programwe ran with a client, during the workshop an attendee said, “if compliance knew we were getting out of the building to talk with customers, they’d flip out.”

The Root of the Problem

Inside corporations, avoiding trouble is a tried and true path to promotions.

Corporate lawyers look for ways to say no. A situation that could lead to failure or blame is a situation better avoided as nobody gets fired for doing the safe thing.

Legal teams want to avoid any and all possible negative repercussions and as a result, innovation efforts and nimble experimentation become the virus and compliance becomes the antibody. Compliance is there to protect the existing business (as they should), but if that’s all they do innovation will not occur.

...continue reading on Moves the Needle

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