For startups, regulatory compliance is an expression that often comes attached with a headache. It’s a tricky world to navigate, yet it’s an absolute must. For many founders and startup teams, it’s seen as a constraint to innovation, something that hinders future possibilities, and an obstacle to the dynamic nature of startup development.
It doesn’t have to be like that, though.
According to Spencer Hawes, the co-founder of Runway Strategies, innovation and regulatory compliance can work side-by-side from the very beginning – by prioritising the team. It takes some creative thinking and considered steps to be made, but it’s a worthwhile approach to long-term sustainable growth.
Regulatory compliance refers to a company’s adherence to laws, regulations, guidelines and specifications. For startups, it can be particularly challenging given their lack of resources and appetite to expand. Moving to new markets, launching new products – it all requires compliance.
We decided to take a look at the world of regulatory compliance a little closer, exploring how startups can navigate this world.
One element that is vastly overlooked in regulatory strategies is focusing on the team from the very beginning – and this could be what causes that all-too-familiar compliance-induced headache.
Creating a cross-disciplinary, coordinated team that involves the three key functions of Operations, Legal and Policy/Government Affairs is a key place to start. When these teams are working together for common goals, they are incentivised to work together, and this makes the process a lot easier. A cross-disciplinary team under one central shared corporate strategy makes them more cohesive, collaborative, and effective.
Next up in establishing a strong team is giving holistic visibility into regulatory and policy issues. This allows teams to know, in their daily efforts, what are redlines versus nice-to-haves when negotiating and making trade-offs.
This is particularly important in avoiding bottlenecks. For instance, in matters where a single individual/team is charged with strategic decision-making in regulatory matters, should local teams disagree on the approach, Hawes recommends centralized ownership. This involves taking the decision out of their hands, allowing for quick resolution —with the added benefit of increasing consistency in approach across markets.
Ultimately, to create a united team focused on a clear goal, and working towards stronger regulatory compliance, the team has to be motivated. According to Spencer Hawes, this can be done via incentives.
Hawes proposes reframing performance assessment, rewarding employees for internal collaboration, risk-taking (as well as defeats) and overall attainment of the company’s objectives and success of its regulatory strategic approach. Employees are more collaborative and deferential to company objectives when they aren’t concerned with potential negative professional outcomes for them personally.
Empower team spirit
Through these tips, your startup can work towards building stronger regulatory compliance, straight from the heart of the team.
Organizing and empowering your team and employees around the company’s regulatory strategy, especially when breaking into new markets can transform regulatory requirements into “an accelerator rather than an obstacle”, according to Spencer.