The Real Problem of Compliance

I was recently speaking at a meeting with some fairly large public companies. The topic was a relatively new SEC requirement: plain English explanations of executive compensation. After I spoke, there was a lull and it seemed that no one had any questions. And then, just as the organizers were about to move ahead onto something else, one question came, then another, and another, and another.

Actually, I'm not sure that question is the right word. The tenor was more of a statement ... really, a complaint about the prospect of having to spend even more money for compliance. It wasn't the plain English disclosures so much as all the recent waves of compliance issues. The displeasure really came in several parts: the seeming arbitrariness of many of the regulations, the sense that business is starting to exist for the sake of regulation and not the other way around, the attempt of the SEC to push its requirements into other countries, and the cost of it all.

I could understand the displeasure - I've heard much of this from upper level management before - but this spilled forth in a rush of bitter anger that was palpable. Someone did eventually say, "Let's be fair; he's not with the SEC," which did get a laugh, but it was like putting a spark to gunpowder.

What really surprised me, although in retrospect it shouldn't have, is that so many businesspeople from such a range of companies were acting completely emotionally. Their focus was on themselves, understandably, but in a way that did not allow any improvement of the condition. For example, they were literally saying, "The regulations are killing us!" I asked, "Were your revenues higher this year than last? Did you make higher profits this year than last?" The answers were yes and yes. So I replied, "Then it's not killing you." Oh, no, they said, the compliance issues are killing us.

Again, hearing this isn't new, but I found that as I applied some logic to the situation, they wouldn't change their focus. They wanted to remain in pain, which is a pretty common, if perverse, reaction. But complaining only about how something is unfair is useless. Either it is out of your control, in which case you can't do anything about it and should focus on what you can do to minimize the impact, or it is in your control, in which case you should stop complaining because you're doing it yourself.

But many executives apparently are doing neither. They continue to complain and don't make the effort to find a better way to deal with things. For example, I pointed out that Sarbanes-Oxley business controls documentation gets you maybe 90 percent of the way to real business process reengineering, where you can eliminate a lot of waste and work in a more rational fashion. Their reaction? "It sounds good, but I'd like to see you make it happen here." Yet I can imagine the reaction of any of these people if a subordinate took the complaining approach when being told that there was only X amount of time for a given project.

If compliance is that much of a burden, use the courts and lobbying to see if you can get changes. But in the meanwhile, the real problem, as usual, is ourselves. Instead of feeling crushed, find how you can make the weight lighter at least, or see if you can make multiple times more profit from the expense, by actually using the information you get to improve business.

iPhone Seeing Share of Problems

Most of what you'll see in the press about the iPhone seems to be raves. But to get a better rounded picture, it's informative to see what customers are saying in Apple's support forum. Some of the complaints:

• No support for AOL, Yahoo, and MSN instant messaging clients.


• No voice dialing support.


• One of the more "locked-down" phones you can find, which means that you're more than usually tied to the service provider - AT&T in this case.


• The headphone jack needs a special adaptor for most headphone sets.


• No support for custom ring tones.


• No to-do list in the calendar function.


• If you aren't careful with what features you leave on, a battery charge can last under half a day.


• Volume is less than on many phones and can require particular "technique" of use to hear.

There is even one person complaining on Slashdot that the phone won't work with the 64-bit version of either Vista or Windows XP and that a post on the Apple support forum about the issue was removed. (Apparently the incompatability is not listed on the iPhone specs, according to Engadget.) And reportedly AT&T insiders were saying to the blog Ethan Says/Homorific that the iPhone frequently drops calls. (Not something you want to support if you're trying to deal with customer perceptions that dropped calls are a carrier problem.) And this is just scratching the surface of the commentary you can find on the web.

Apple has had a good reputation in industrial design and engineering, but ultimately you need a product that works and doesn't just look good. The Apple die-hard group as a percentage is a tiny part of technology consumers and releasing something that starts making people angry is one of the best ways to damage a product line. Negative word of mouth travels faster and farther than positive.