Why Implement Regulatory Change Management?

Change is the law of life. And of business.

In the course of everyday life, to respond or not to change pretty much depends on the person — some do and some don’t with little or no regard for whatever implications that may arise. We wish we could say the same for business, especially in the regulatory arena, but no. Regulatory change has a significant impact on every organization, regardless of industry, and its policies. And to quote Darwin (with apologies), it is not the strongest of organizations that survive, nor the most intelligent, but the one most responsive to change.

Failure to respond adequately to regulatory change drives unnecessary costs. And compounded by the inability to arrive at a clear understanding of regulations — “are we over or under-complying?” — is highly costly in terms of safety, product, brand and reputation. The truth of the matter is that most of the time, organizations are sincerely unsure where they stand when it comes to compliance.

Enter Regulatory Change Management to effectively manage and monitor the entire compliance life cycle to ensure that the act of compliance becomes ingrained into the culture. Additionally, here are 4 reasons why you need to implement regulatory change management:

1. Over and under complying is expensive.
2. Organizations need to be able react to risk and business change.
3. Regulators are tired of paper-based compliance programs.
4. Regulatory change management needs to be defensible.

Firms that lack a structured approach to managing change are often caught in a limbo of working in compliance versus working on compliance. The former often involves being caught off guard, being reactive and firefighting as opposed to the former, which involves doing proper analysis, being proactive and establishing a regulatory change management structure in place. The consequences that stem from noncompliance with key regulations include hefty fines and penalties, revocation of licenses, lawsuits and reputation risk which have detrimental effects on the brand and credibility of an organization, and in the long run, fundamentally have an impact on the organization’s sustainability.

How is your organization handling regulatory change management?

 

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