Corporate legal and compliance (L&C)  teams are usually considered the very antithesis of corporate innovation. The perennial “no” amidst a wide-eyed crowd enthusiastic with the prospect of shaking up the status quo and creating something new.

It is not without reason.

Established organisations have all implemented systems, processes and recruited people to keep the business afloat and keep it delivering on a repeatable and scaleable business model.

For organisations in industries such as healthcare and financial services, this goes one step further to ensuring that the delivery of this business model does not contravene any governing regulation.  

While startups can often avoid the attention of regulators while they are small but as they find traction, grow and  become more profitable, is is far more likely that they will capture the attention of regulators, as UBER and Airbnb discovered during their growth curve. The cost can often be hundreds of thousands if not millions of dollars in penalties, reputational damage, loss of business and worst of all a suspension or revocation of license to operate.

So how then do organisations with regulators watching over their every move run experiments to test new ideas, a process fundamental to the science of innovation?

Legal and compliance can actually play a critical role in helping established organisations to innovate.

It is often not L&C who stands in the way of innovation but the rest of the organisation adopting what becomes the self-fulfilling prophecy of “we can’t innovate because our industry is too regulated”. Employees are often paralysed by fear of failure and of regulators beating down their doors.

L&C can help organisations use legislation to their advantage so that they can actually run experiments, test ideas, gather customer feedback and get closer to solutions that work.

To demonstrate this point, the team at Collective Campus recently hosted a hackathon for Australian Unity, the purpose of which was to quickly build experiments to test key assumptions underpinning a number of private health insurance (PHI) policy ideas to determine whether there was enough positive feedback to progress ideas to the next stage, or kill ideas minus the wasted time and money that comes with commercialising the wrong ideas.

Undercover economist Tim Harford and author of Messy: The Power of Disorder to Transform Our Lives says that “unexpected change of plans, unfamiliar people, and unforeseen events can help generate new ideas and opportunities” so it’s critical that we get cross-functional people in the room, all with their own perspectives and world views.

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