Despite best intentions, sometimes things do not work out. This post discusses some lessons learned from Nimonik on failed implementations of our compliance solution and includes recommendations for any company looking to implement a compliance solution.
Most companies solely discuss the successful implementations of their solutions. The reality is that many projects can fail. In the novel Anna Karenina by Tolstoy, we are told that “All great marriages are similar and every failed marriage is unique.” Similarly, every successful compliance project looks very similar, but every failed implementation is unique.
I wanted to take this opportunity to share a few (anonymized) cases where our solution was abandoned after a period of time.
Some things change
Over the years, Nimonik has developed a robust implementation and onboarding program for its customers. This program has been built on best practices as well as lessons learned from our customers.
Some of the cases we analyzed where our product was abandoned include two pipeline companies, a pest control company, a cannabis manufacturer, an automotive parts company, a food manufacturer and a rail company. In all of these situations, the ground shifted in one way or another. The main shifts that took place can be placed into one or more of the following categories. These can be aligned with the well known 5 Ts, outlined here by Scott Nadler:
“Sometimes corporate events (the “five T’s”) drive a clear need to question what you have:
- Transitions: You are new in your job with both an expectation that you will change things with only a short honeymoon period in which to do that. Or, a transition took place above you, and your new boss brought in their expectations from their prior company.
- Transactions: Your company just got spun off from the “mother ship” and you do not have any systems (or even staff). Perhaps you merged with another company and two great but different systems have to be reconciled.
- Transgressions: Something went wrong, leading to NOVs or customer concerns or bad press. That creates a need to do something different, or at least look like you are. (Not surprisingly, transgressions often lead to transitions.)
- Transformations: Management consultants got paid three times your annual budget to play 52 pick-up with your company, and you have to figure out how to live with the results.
- Transparency: Something – going public, increased GRI reporting, a transgression, or simply growth – is opening your company up to more public visibility, and you have to be “prepared.”
Management Change & Ownership Change
At Nimonik, we make a point of ensuring that there is strong alignment between the customer and our solution before, during, and after implementation. Specifically, for a compliance solution project to be successful, we need the organization to have a strong belief that proactive management of compliance is an investment in operational excellence. If a business thinks that compliance is simply a cost to minimize then they are unlikely to allocate the sufficient resources to ensure a successful implementation. Additionally, if compliance is viewed as a cost then there is likely a culture that will drive cost-cutting, shortcuts and expediency on compliance programs. Instead, the company needs to have an organizational understanding that effective compliance programs improve operational efficiency and excellence.
At a more granular level, Nimonik succeeds when we have the three key types of people in place:
- Management buy-in
- Project leadership
- An implementation team
Management buy-in is critical as it allows for the project leadership to engage with a solution provider (Nimonik in this case) and obtain sufficient budget. Management also provides an overarching strategy and direction for environmental, health and safety and risk related activities.
In more than one case, the Management of our customers changed and this support was lost. Project leadership then disappeared as they lost resources and support for the project. It is not uncommon for a senior EHS person who reports to the CEO to be removed. That person’s responsibilities are often split – environmental activities are transferred to operations and engineering while safety is sent to HR. Simply put, this is a death sentence for any sort of transversal project that tries to solve EHS compliance issues across an organization.
Lesson: If you foresee management changes at your organization, we recommend putting projects on hold until the dust settles.
Project Lead Change
In other situations, the project lead on the compliance solution had left the position and the new project lead did not have the same vested interest or passion for solving compliance in a proactive manner. While the Nimonik team tried to engage, educate and train the new person, there was a failure of transfer of the project over to this new person – who understandably had their own ideas and approach to compliance.
Lesson: If your project lead changes, be wary of any projects that are not deeply embedded in the organization’s operations.
Lack of Team Support
In a couple of cases, the project lead was promised support by their team to implement a solution. However, when the time came to actually take the Nimonik solution, use it and deploy it across the globe, there was a lack of resources. With companies constantly trying to thicken margins, there are rarely extra resources allocated to a new project. As such, Nimonik was faced with situations where there was simply not enough time and resources available from a project team. Since they did not fully implement the solution, they did not see the full value and when budget time came, they decided to cut the project.
Lesson: This is of course a bit of a vicious cycle – a failure to invest in systems will make those same systems seem inadequate and of low value.
Another major reason that some customers have abandoned compliance systems is the conflict between various software systems. There is a perennial debate all organizations face – one platform or point solutions that excel and specific tasks. There is no right answer, but it is clear that the tide ebbs and flows across all organizations. We typically see companies start with point solutions, then try to consolidate them, realize the consolidated system is not user-friendly and then allow teams to purchase point solutions.
Nimonik is a point solution for comprehensive compliance. We help businesses and governments identify and track all of their obligations in regulations, standards and internal corporate documents. They can then receive and create actions and conduct audits to ensure compliance. These functionalities can be achieved in many other systems from SAP to Intelex and Enablon. The benefit of Nimonik is that it excels at the problem it solves. The other systems are often okay or good at many things, but not great at anything. As such, we have had customers who decided to try and consolidate their systems and as such they abandoned point solutions such as Nimonik.
Lesson: If your organization is deploying a large platform, focus on that. If your company has no immediate plans to consolidate systems, then get the point solutions you need to run a successful compliance program. If you have a large platform established, but there are certain key elements that are not being solved – look for a point solution like Nimonik.
Money talks. In certain cases, companies we serviced were going through budget restrictions due to various factors – acquisitions, industry change, revenue drops etc. As such, they searched for any project that did not have a clear and short term benefit to the bottom line. Compliance is similar to debt or insurance in the sense that its benefits are hidden and only manifest themselves when something goes wrong. You can skimp on compliance programs in the short term, but they always catch up to you – the question is when, where and how much will it cost (in money and lives). You can see our top ten industrial compliance disasters webinar here.
Lesson: Ensure you have an up-to-date business case with a clear return on investment for your compliance programs and systems.
There is no magical solution to ensure your compliance solutions stay in place when there is change to management or project leadership, or system consolidations or budget cuts. The main advice we can provide is to consider all of these factors when you decide to invest in a solution and engage with a vendor. Many of these items are out of any one person’s control, but you can plan for many of these changes and consider your options. At the end of the day, the key is to drive value at your organization and clearly communicate that value on an ongoing basis to the various stakeholders who can make or break a project.