Ford using smartphones to drive smarter compliance

By David Hechler, From Corporate Counsel

The automaker’s compliance team created an app that allows employees to get guidance on their phones. Now they hope the workforce will download it.

Raphael Richmond had been Ford Motor Co.’s global director of compliance for about seven months when she was invited by corporate secretary Bradley Gayton to imagine the future of compliance. It was November 2013, and she thought the company had “terrific policies” and “a great code of conduct,” she says. But she sometimes wondered what all compliance chiefs must wonder at times: “How do we know if our communications are working?”

She might have added a question that keeps compliance chiefs awake at night: Is there any way to know before a scandal bubbles to the surface?

But on that gray Friday afternoon in Dearborn, Michigan, Richmond and her small team of lawyers were asked to banish such thoughts and summon utopian dreams. The new director closed her eyes and pictured a future, she says, in which there was “no opportunity to go astray,” a day when invisible processes were so intelligent that “employees would simply be guided to the choices that were compatible with our corporate ethics.” They called it “zero-effort compliance.”

Three months later, they got real. The team concentrated on “less-effort compliance,” Richmond says: “We wanted it to be as easy as possible for employees to do the right thing.” Brainstorming about the best ways to reach today’s global and mobile workforce, the lawyers focused on a tool that brings the scattered masses together: mobile phones. What about an app?

That was how Ford’s compliance app was born. And if it isn’t the first of its kind, it’s at least one of the earliest. The app also gets high marks from two independent compliance experts.

The idea, Richmond explains, was to give Ford’s 187,000 employees information “just when they need it, in little, bite-size pieces that they can easily digest.” Ethical challenges, after all, often arrive when employees are out in the world rather than sitting at their desks. Why not give them answers they can access wherever and whenever they need them? It seemed like a natural, and they quickly got together with the dedicated IT team they work with regularly.

While IT fashioned the architecture, Compliance began gathering content. From the outset they followed one principle, Richmond says: “We tried to take off our lawyer hats and put on our common sense hats.” They wanted to cover “those areas that employees most often ask about—or don’t but should.” And always they tried to convey information in “simple, concise and very plain English.”

After about six months of intense labor—which they had to squeeze in without neglecting their “day jobs”—they had an app that was ready to test. Compliance chose 300 employees who work in different functions and are based around the globe. They were asked to download and use the app, then critique it. Some of their feedback led to modifications that were included in the final version, which was released in March. (It can be downloaded for free in app stores by searching for “Ford Motor The Right Way.”)

What kinds of suggestions made it into the app? Richmond cites an example. One employee asked what you’re supposed to do if you’re traveling abroad and you’re having a productive conversation with a government official, who suddenly announces, “Let’s continue this conversation over lunch.” Can you pay for the lunch?

This question is now included in the anti-bribery and anti-corruption category under frequently asked questions. The answer: In general, you’re supposed to seek preapproval for meals and gifts. In this instance, when there isn’t time, you can pay for “a reasonable meal,” which is defined as “light refreshments” or “a basic meal.” The guidance also suggests asking the official whether Ford’s paying for her meal would violate any of her own government’s ethics rules.

In addition to the FAQs, the app also includes policy summaries, a decision tree called “Can I …?” and a link from which to report suspected violations of company policy. There are tips for managers, a link from which to download the company’s code of conduct handbook and a “message from the executive team,” which includes a video and transcript of CEO Mark Fields explaining the importance of ethics and compliance. (A classic demonstration of “tone at the top,” which compliance gurus relish.)

Richmond emphasizes that it’s still quite new—many employees haven’t even heard about the app yet—and it will change over time. In fact, Richmond and her colleagues want it to. The app should be a living, evolving tool that reflects the company’s growing understanding of the risks employees face. It should also get a big push this summer, when the entire workforce will receive an all-company email encouraging them to download it. Translations into at least a half-dozen languages will be added later in the year, Richmond adds.

We asked two columnists who write about compliance for our website, Corp­Counsel.com, to download the app and tell us what they think. Alexandra Wrage, founder and president of Trace International, gave it a test drive and says that she likes it. As the leader of a nonprofit that focuses on bribery and corruption worldwide, Wrage is in touch with the latest developments: “We speak to a lot of companies about the innovative tools they’re exploring to reach and engage their teams,” she wrote in an email. But she doesn’t know of any others that have created compliance apps.

“I like this app,” she wrote. “It isn’t flashy. On the other hand, it’s clear and practical and avoids legalese.” She also agreed with the analysis that spurred its creation: “Because it’s portable, it’s at hand if an issue arises. With over a billion smartphones in the world, apps now have better global coverage than communications tied to desktop computers.”

Ryan McConnell was also impressed. A partner at the Houston firm McConnell Sovany, the former federal prosecutor specializes in corporate compliance, internal investigations and white-collar criminal defense. He hadn’t heard of any companies that have created an app like this either. “It’s novel, and it gets employees to focus on compliance—which is a plus,” he wrote. “It organizes information on several code of conduct topics in a straightforward manner and gives employees guidance on solving frequently asked questions, like can they accept alcohol from a supplier.”

McConnell did identify one missed opportunity. “I could not find a single car photo on the app, which was extremely disappointing,” he said. “Why not tie the brand and what people recognize as its products to the compliance program? Isn’t this how compliance gets embedded in the business?”

“I love it,” Richmond responded, when McConnell’s suggestion was repeated to her. “I will take that one under consideration.” McConnell also asked another pointed question. “Do employees have to download the app?” he wondered. “What does it say about your compliance program if you create an app and no one downloads it?”

This is a question that Richmond has thought through. Downloading is purely voluntary. Once the app is given a big push, Ford will track the number of downloads, she says. The compliance department will urge employees to download it, but only compliance training is mandatory. The app is not.

In fact, Richmond notes, some employees have asked questions that betray anxiety about the tool. “Are you going to be tracking what we do on the app?” one person asked. Richmond quickly reassured the employee that Ford did not have, and did not want to have, that capability. No one will be investigating how much time employees spend reading or asking questions about bribery, for instance. The compliance department will be looking for ways to measure the performance of the app, Richmond says, not whether an employee’s use of it should raise suspicions.

One Ford employee has been an unabashed fan since day one, and doesn’t seem worried about how much he uses it. He is general counsel David Leitch. “Anytime we have a visitor in now from law firms or from other companies that may be benchmarking, he will pull out his phone and start showing them our app,” says Richmond.

A common reaction, she adds, is: “That’s so cool. We need to do that.”

IMAGES: Photos courtesy of Ford

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