Amongst my clients I have a good representation of ‘regulated industries’ such as pharmaceuticals and financial services. I, myself, spent many years in pharmaceuticals before founding the consulting group The Chalfont Project.
A typical expression from management in these industries has always been: ‘We can’t do X,Y, Z because we are a regulated industry’. In my experience, nine out of ten of the times when the ‘regulated industry argument’ has been used, it has absolutely nothing to do with a regulatory issue. It is a default answer, a learnt answer repeated automatically, that tend to block good creative ideas and innovation. It’s a proxy for no. When I have encountered this, it has almost always been a case of managerial incompetence disguised as regulatory compliance.
I have often challenged my audience: where in the ‘regulations’ does it say that you always require 20 signature approvals for a document? Where does it say that you need 3 months to decide Y? Where that you must have al those heavy processes, some of them clearly redundant? Where in the regulations, indeed, does it say that decisions will not followed up, that people will hold on just in case the decision doesn’t stick? Where do you see the obligation to have massive monthly reports quarterly reports and reports on reports? Do ‘the regulations’ say anything about having an incentive scheme that seems written by a quantum physicist? Perhaps the size of your powerpoints deck? Minimum a terabyte? Etc.
The worse that may happen next is the smiling or even laughter, as if this was a bad joke, or a clever trick by the consultant speaker.
No, regulations are there to regulate ethics, keep standards of quality and safety and, in pharmaceuticals, to ensure public health. Sloppiness, slowness, tiredness, busyness, complexity, process exhaustion, imitative fatigue and the agility of a Panzer Division are not intended goals of regulations.
‘We are a regulated industry’ is a cheap, easy hiding.
Every organization, from a super-regulated industry to the opposite, can have speed, agility, innovation and entrepreneurial ethos. Even the Army.
I know, I know, you work on that software start-up and you don’t know what the hell we are talking about. Never mind. Keep going.