3 Real-World Business Compliance Tales And Their Ethics Meanings (Including Corporate & PCI Risk Management Issues)

Pull up your chairs fellow professionals and let’s chat about business Compliance & ethics!

This is super valuable, we promise 🙂

Yes, this topic is boring, unsexy and dry BUT this topic is also critical to do correctly. Other wise laws may start being broken which can land the business in superhot water.

In this post we are going to share three stories around Compliance, which things went wrong, and how these stories could have had a much better outcome for the businesses involved.

The first tale comes from Be Pro’s time at an agency run by a college professor. This professor taught venture capitalism and was a self-proclaimed entrepreneurial master. However, they lacked basic reporting on the performance of their employees. Within a few weeks, after Be Pro had implemented reporting into the business, it was clear that one employee was underperforming. So much so that their underperformance was causing bottlenecks and extra work for everyone else on the team. The data presented a clear case to immediately place this employee on a performance plan. Without reporting though, they were running into legal issues when they needed to let him go. Ergo, this person was allowed to still be on the team for a few more weeks while Leadership attempted to work with them and record all efforts. Then, they were finally able to safely terminate this weak link.

The moral of this story is that reporting is important to Compliance. Data gives you a place from which to track and correct employee performance. According to Culture Amp, “Employees perform better when they have goals to strive for and work towards. Measuring employee performance helps calibrate those goals by providing insight into where someone is doing well and could be stretched and areas that are not a strength yet.” [Source]

If this business had developed the muscle around Reporting and been brave enough to hold their people to Account, they would have been able to let this weak team member go faster.

Why Is This Important? Because when the rest of the team sees that someone can behave lazily and ignore the rules, they will also start to behave in such a way. This one employee’s lack of performance permeated the rest of the team and caused a weird culture.

Moving On…

This next tale comes from a period of time right after the last one. After moving on from this professor-run agency, Be Pro moved to an agency that was TEACHING the college professors in the first place. Surely, this authoritative agency would be far more compliant and above board than the previous one.

Ironically, the exact opposite was true.

Beyond a basic employment agreement, this agency operated on the whim and emotional tides of the sole owner. Promotions and demotions could occur in an instant. When data was reported, it disappeared into a void. Even worse, there was no Governance around this reporting. Eventually, this behavior landed the CEO in court over illegal practices and the owner was unable to show any reasonable storyline as to why they acted in the way they did.

The moral of this story is that Governance is also critical to Compliance. If this agency owner had operated within their own self-designed systems, the data would have clearly shown that SOPs were not being honored throughout all areas of the agency; including the CEO themselves. Sadly, this business was unable to show any data around the legality of their behavior, and it eventually caught up to them.

Why Is This Important? Because when there is no Governance around reporting, harmful business decisions can be chosen that are based on hearsay & emotion. Not hard data. Which, from a legal standpoint, can land any business in hot water over Compliance issues.

Now onto our last tale…

Finally, the last tale comes from another agency that was run by an owner who should have won. This owner had a great Offer, a solid understanding of their Customer Profile, yet still unfortunately died out. There were many contributing factors to their decline. For example, they were unable to keep a stable team together, and the turnover among their People was a concerning issue.

Above all, they were a massive compliance risk. Especially around Money.

Taking a credit card for payment requires a business to be PCI Compliant. This simply means the company abides by industry protocol rules to keep customer payment information safe and secure. For example, if credit card information is written down on a piece of paper like an order form, those pieces of paper need to be locked away from general employees AND also must be shredded after a certain period of time. This agency had stacks of paper with credit card information strewn about the office. Any bad actor could have stolen that payment information and caused a serious problem; payment compliance was a massive issue for this business.

Email compliance was also an issue. Legally, if someone unsubscribes from your email list, you cannot email them anymore without further permission. This owner wanted to break the law AND even work around their CRM’s rules by sending an email broadcast to every possible email address on their list.

Such operational sloppiness resulted in this business devolving to a former shell of itself with a deluded owner still operating at the helm.

The moral of the story is that Compliance exists for a reason: to protect the business and its customers. Akin to the seatbelt in a car which exists to protect the passengers in case of an accident. And why you will get a ticket for not wearing one.

Why Is This Important? Because if Compliance is ignored, it’s bad for everyone involved. This business owner got lucky that the people on their team were honest and knew the laws around their respective roles.

If you want to Be Pro, keep the business compliant. Yes, this definitely takes a commitment and may even involve extra overhead to do properly. However, to willfully ignore this responsibility that comes with running a business, you run the risk of being another Enron, Tyco or WorldCom…

Can you relate to any of these stories? Did you learn anything new from their experiences? Let us know in the comments!