Tag Archives: compliance

Do Regulators Have Customers? (aka Attack of the Killer Tomatoes III)

by Larry Grant

So I’ve implied that the FAA has “customer confusion.” Why is it a big deal? Many government agencies have, in effect, dual roles – providing service as well as acting as regulators. For a reinventor, there are two things to be concerned about. First, it is very difficult to be both a service provider and a regulator at the same time. Second, and far more important, being clear about who is your customer is central to reinvention.

Many of our clients think that the notion of “customer” relates to how you treat people in the spirit of good “customer service.” They fear that if their agencies don’t believe that the people they deal with are their customers, they will behave cavalierly toward them – especially toward those to whom they are supposed to deliver obligations.

The problem with this point of view is that it views customer service as the central issue. In a reinvented organization the concept of “customer” goes far beyond how workers treat people. Reinvention is literally turning the organization upside down. In a bureaucratic organization the principles are hierarchy, and control through command. A reinvented organization is one that is accountable to its customers, not its “bosses” in the chain of command. In other words, in a reinvented organization the customers are at the “top” of the org chart, and everybody’s job is to either serve the customer, or serve someone who does. The issue is not customer service (although this is important), it is, rather, fundamentally changing the accountability relationships within the organization and between the organization and who it is intended to serve.

There is plenty of evidence that this is a key to unlocking the real power of individual workers and teams, and unblocking the energy and creativity of organizations.

Government workers know in their gut that the objects of regulation are not customers. Asking a traffic cop to call a speeder a “customer” is just nuts. To get them to treat these folks like human beings by calling them “customers” only does more to reinforce their resistance and cynicism toward reinvention.

For want of a better term, we call those to whom we deliver obligations “compliers.” There are issues with this, for some, because the term also includes “non-compliers” (i.e., people who don’t live up to their obligations), but on the whole this does help government workers understand that these folks are not “customers.”

How do you get your workers to treat these “compliers” well? Start measuring “complier treatment.” It won’t compare to measures of “customer satisfaction,” but it will get feedback on the quality of treatment. The next step is to think about organizing the work so that workers who are in compliance, regulatory, or control function are separate from those delivering services.

Other resources:

Situational Compliance – What’s That?

Achieving Compliance When You Can’t Compel It

The Attack of the Killer Tomatoes: Part II

by Larry Grant

Who are the customers of compliance or regulatory functions? Usually elected officials. To reinventors the customer is the primary intended beneficiary of a specific service (or product). In the case of regulatory functions the primary intended beneficiaries of the process are the citizens (or the “people,” as in “we the people”). In a representative democracy such as in the United States, the interests of the people are presumed to be held by the officials we elect.

This idea resonates with some and confuses others. We need to say a lot more about the idea of “customer” and “complier,” but since this started with “killer tomatoes” and government regulation, let’s start at the beginning.

The history of regulation (or, if you will, “government interference”) is pretty interesting. It certainly goes back to Roman times with the regulation of grain and slave markets. But “modern” regulatory practices come just after the dawn of the industrial revolution when the British government began to take an interest in factory and working conditions—especially in the mines. In the United States it was certain of the states (like Massachusetts) that established regulations around factory working conditions. It was only after the turn of the 19th century that the federal government got involved. The irony being that the greatest pressure for regulation of industrial practices came from big business as a means to increase the costs of smaller businesses and thus drive out competition.

As regulation (and regulatory government agencies) became more common a certain regulatory rhythm began. A crisis (real or imagined) creates a public outcry, a set of laws are passed, a new (or old) regulatory agency is obligated to interpret and enforce the laws by creating regulatory processes, which, if followed, will end the crisis and ensure that it will never happen again. Of course, like a river, which you can’t step into the same place twice, the same crisis in need of regulation rarely occurs. In this way there is both opportunity for new crises—begetting new laws, agencies, and rules, and, as true of any good bureaucracy, processes beget even more processes, interpretations, rules, and the experts who know them. Over time the only people who really know the rules—because it becomes part of their life-blood of profit, the real engine in the whole thing—are those who work in the regulated industries or markets. The regulatory agency and its agents are now long out of the crisis-driven public eye, and dependent on the regulated to understand the regulations and the processes they are intended to regulate. A former professor of mine viewed this as a classic example of the “symbolic uses of politics” where crisis begets action, action begets, quiescence, and quiescence begets in its turn cooption. In effect, the regulatory agency gets “captured” by those whom they are supposed to regulate.

One fundamental reason why this happens is confusion about who is the customer. At the most obvious level, it doesn’t make sense to say that the individuals and businesses are the primary intended beneficiaries of the regulation. Sure, they do benefit by being regulated, but it is we the citizens who are the primary intended beneficiaries. And most government workers know this in their bones.

Look at the Federal Aviation Administration mission and vision http://www.faa.gov/about/mission/:

Our mission is to provide the safest, most efficient aerospace system in the world. Our vision is to improve the safety and efficiency of aviation, while being responsive to our customers and accountable to the public.

Who do you think they believe to be their “customers?”