Regulatory Risk

You are an environmental compliance specialist for a small plastics manufacturing company, TRS Polymers Ltd. You are currently faced with advising your boss, Ivana, (the company’s Chief Compliance Officer) as to whether or not to spend money on new technology that will reduce the level of the toxic chemical, prenthrinsene, in the wastewater that flows out the back of the factory and into a lake. The factory's emission levels for prenthrinsene are already within legal limits. However, you know that environmental regulations for rotmanite are widely thought to be lagging behind scientific evidence. In fact, a scientist from the university had been quoted in the newspaper recently, saying that if emission levels were to stay at present levels, the fish in the lakes and rivers in the area might soon have to be declared unsafe for human consumption. Further, it seems clear that if companies (yours and others) in the region don't engage in some self-regulation on this issue, there is good reason to fear that the provincial government — backed by public opinion — may move to force companies to begin using the new technology, and may in addition require companies to submit monthly emission level reports (which would be both expensive and time consuming). But you also know that the company's environmental compliance budget is tight. Asking for this new technology to be installed would put your department way over-budget. And as Ivana frequently reminds you, "the money has to come from somewhere." It's time to [[start your meeting|start your meeting]] with Ivana.

Ivana is sitting at her desk when you enter her office. "Come on in," she says. "I'm just finishing an email to Marcus." Marcus, of course, is the plant manager in your main production facility. You smile and nod. Ivana clicks "SEND" and turns her attention to you. "So," she asks, "What have you got for me?" You appreciate her blunt approach. No small talk. So you get right to the point. You tell her: "[[I think we should invest|invest]] in the new emissions-reduction filter to reduce the amount of prenthrinsene in our wastewater." or "[[I don't think this is the right time|don't invest]] to invest in the new emissions-reduction filter."

"OK, interesting," says Ivana. "But our emissions are already well within the legal limits." You respond: "Sure, that means what we're doing is legal. But what's legal [[isn't always ethical|not ethical]]." or "Yes, but as you know the current regulations are lagging behind the science, and the science suggests our current output is [[environmentally dangerous|environmentally dangerous]]." or "Yes, you're right. Maybe we should just keep an eye on thigs. Maybe the new filtration system [[is not necessary at this point|not necessary]]."

"OK, interesting," says Ivana. "What's your reasoning? You know I can't go to Frank with just a recommendation -- I need to make the case for him, even when it's a recommendation that will save him money." You respond: "Well, the [[main thing is the cost|the cost]]. This is cutting edge technology, but it's also really expensive technology." or "Well, the main thing is that we are already [[well within legal limits|legal limits]] for prenthrinsene. Or within them, at least. So there's no need from a regulatory point of view." or "Well, the main thing is that [[our competitors aren't doing it.|competitors]] I've spoken to colleagues at a bunch of other companies, and their thinking is that if the government isn't requiring it, they're not doing it."

Ivana sits up a bit straighter at her desk, and raises her eyebrows. "Excuse me?" she says. "I didn't ask you in here for a sermon. I care about ethics as much as the next person. I'm just saying we are already doing a good job of pollution abatement, and now might not be the best time to shoot for the stars." "Sorry!" you say, "I wasn't trying to be preachy." And then you add: "But 'our best' might not be good enough, that's all I'm saying. We don't need to shoot for the stars, but maybe it's time to try to get [[ahead of the curve|ahead of the curve]]." or "But we both know that the current regulations are lagging behind the science, and the science suggests our current output is [[environmentally dangerous|environmentally dangerous2]]." or "But that biologist, Professor Taras, said in the newspaper last week that the pollution levels in the lake are getting so high that the fish in it might be [[unsafe for human consumption|unsafe]]."

Ivana puts her elbows on her desk, and leans forward a bit. "Look," she says. "I know just as well as you do what the science says. I'm just saying we are already doing a good job of pollution abatement, and now might not be the best time to shoot for the stars." You respond: "We don't need to shoot for the stars, but maybe it's time to try to get [[ahead of the curve|ahead of the curve2]]. The government has been looking at this issue, and we all know that new, tougher, regulations could come in at any moment." or "I's pretty clear we're going to have to do this eventually. Why not [[get ahead of the competition|ahead of competition]], so that we look like leaders when the change eventually becomes mandatory." or "But that biologist, Professor Taras, said in the newspaper last week that the pollution levels in the lake are getting so high that the fish in it might be [[unsafe for human consumption|unsafe2]]."

"OK, great," says Ivana. I'll let Frank know that our department supports delaying the investment." Frank, of course, is the company's CEO. In fact, he's the son of the guy who founded the company. But he also has an MBA, along with a Masters degree in chemistry, so he knows his stuff. "OK, great!" you say, and leave Ivana's office. The next day, you receive an email from Frank himself. You hold your breath while you read it: <blockquote>Hi, there. Ivana tells me you've been doing good work over there in Regulatory. She also tells me you're recommending that we NOT invest in the new prenthrinsene abatement technology. I'd like to chat with you some more about your recommendation. Can you swing by at 2 this aft?</blockquote> You exhale slowly. Wow, the CEO. You've met Frank, of course -- it's a small company, and he makes a point of meeting all the new people. But you've never really talked to him at length. Now you're being asked to explain your reasoning for a recommendation that could have a big impact on his company. You quickly type your reply: [["Yes, of course. See you at 2!"|see Frank]]

Ivana sits back and looks at the ceiling. She seems to be thinking through what you've said. "I hear you," she says. "But we're talking about a pretty expensive piece of equipment, here. Where is the money going to come from? I mean, I can talk to Frank about it, but it's not like we are rolling in cash right now." You respond: "I know you want to do the right thing. And I don't think you can [[put a dollar figure on doing the right thing|dollar figure]]. or "I know. It's not a great time to do this, financially, but we're doing to have to do it eventually. We should [[invest now, rather than pay later|invest now]]." or "I know. It's a [[bad time to do this, financially|bad time]]."

Ivana shakes her head slightly, frowning. "You know that business is about compromises. We try to do what's right, sure, but we can't do 100% on everything. Everything is a balance -- from workplace safety to quality assurance to environmental concerns. Everything we do puts a price on ethics." You respond: "Yeah, I guess. But I think in this case the right compromise to make is to eat a bit of cost in order to reduce our pollution levels. Not to zero, but better than we're doing now. [[That's the compromise|the compromise]]." or "I don't see it that way. There's no compromise on ethics. The right thing to do is the right thing to do. [[No compromise|no compromise]]." or "I know what you mean. But I wouldn't say we put a price on ethics really. It's more that sometimes a compromise is [[ethically the right thing to do because of balancing ethically-important priorities|ethically important]]."

Ivana frowns, but nods her head. "Oh, I know. You're right. But at the senior executive team meeting last weak, Frank reminded us how tight money is. Competition in our line of products is really intense right now. TRS Polymers Ltd. isn't flush with money. So I'm not sure he'll sign off on an expenditure that will make us the 'good guys,' but at the same time put us at a disadvantage compared to the competition. If they aren't spending the extra money, I'm not sure it makes sense for us to. I mean, it does, ethically, but it's a hard sell." You respond: "Frank relies on our department for advice. We need to make him see that the expenditure can't be avoided forever. He should think of it as an [[investment in our image, not as a pure cost|investment not cost]]." or "It's an investment that the government will force on us later, if we don't take it on [[sooner, ourselves|sooner]]." or "Competitors? Our competitors may well be ahead of us on this issue. [[Frank shouldn't stick his head in the sand, and ignore this issue.|head in sand]]"

"Yes, it's a bad time," says Ivana. "I'm glad you agree. I'll let Frank know that our department supports delaying the investment." Frank, of course, is the company's CEO. In fact, he's the son of the guy who founded the company. But he also has an MBA, along with a Masters degree in chemistry, so he knows his stuff. "OK, great!" you say, and leave Ivana's office. The next day, you receive an email from Frank himself. You hold your breath while you read it: <blockquote>Hi, there. Ivana tells me you've been doing good work over there in Regulatory. She also tells me you're recommending that we NOT invest in the new prenthrinsene abatement technology. I'd like to chat with you some more about your recommendation. Can you swing by at 2 this aft?</blockquote> You exhale slowly. Wow, the CEO. You've met Frank, of course -- it's a small company, and he makes a point of meeting all the new people. But you've never really talked to him at length. Now you're being asked to explain your reasoning for a recommendation that could have a big impact on his company. You quickly type your reply: [[Yes, of course. See you at 2!"|see Frank]]

Ivana smiles, and leans back in her chair. "Our CEO is always happy to hear when his people are cost-conscious!", she laughs. "He'll like that. If we spend too much on something, then there's too little left at the end of the day for something else." She looks out the window thoughtfully, then back at you. "But -- just for a minute -- let's focus on our role. What's your thinking from a pure regulatory compliance point of view?" You respond: "Well, from a compliance point of view we are already [[well within legal limits|legal limits Ivana2]] for prenthrinsene. Or within them, I guess you'd say. Maybe not well within them. But within them. So there's no need from a regulatory point of view. Installing the filtration system right now might be an overreaction." or "Well, the main thing is that the filtration isn't industry-standard. [[Our competitors aren't doing it.|competitors Ivana2]] I've spoken to folks at a bunch of other companies in the region, and their thinking is that if the government isn't requiring it, they're not doing it.

Ivanai smiles, and leans back in her chair. "That's very reassuring," he says. "That's terrific. As you know, our CEO always insists that we always comply with the law, as a very minimum." She looks out the window thoughtfully, then back at you. "But -- and I know you'll agree with me, given your background -- the law really is a minimum standard in terms of the environment. We want to be a good company, not just one that follows the law. Our stakeholders demand more. Shouldn't we try to do a bit better than just doing what's legal?" Ivana tilts her head and smiles. She seems genuinely curious about your answer. You respond: "Oh I totally agree. The bare legal minimum isn't what we should aim for. But I've also been thinking about the cost. Prenthrinsene isn't our only priority, even just from the point of view of environmental compliance. [[Maybe this new technology is just too expensive, given all of our other priorities|the cost Ivana2]]." or "Well, the main thing is that the filtration isn't industry-standard. [[Our competitors aren't doing it.|competitors Ivana4]] I've spoken to folks at a bunch of other companies in the region, and their thinking is that if the government isn't requiring it, they're not doing it."

Ivana smiles, and leans back in her chair. "That's terrific," she says, "that's very useful insight. It's always good to know what the competition is up to, and how industry standards are evolving." She looks out the window thoughtfully, then back at you. "But I don't think we should be entirely satisfied with the idea of just following the herd. Shouldn't we try to do a bit better than merely doing what everyone else is doing? Couldn't we distinguish ourselves by taking a leadership role?" Ivana tilts her head and smiles. She seems genuinely curious about your answer. You respond: "Oh I totally agree. Keeping up with our competitors isn't all that we should aim for. But I've also been thinking about the cost. Prenthrinsene isn't our only priority, even just from the point of view of environmental compliance. [[Maybe there's good reason why others aren't adopting this new technology -- it's just too expensive, given the small benefit|the cost Ivana5]]." or "I see what you mean. If we make this investment now, rather than waiting, not only do we improve environmental performance, but we have an opportunity to look good in the eyes of regulators -- we'll stand out, which may even mean they cut us some slack in other areas. I'm beginning to think I was looking at this wrong. [[We should invest in the new technology.|change of heart Ivana]]

At 2pm that day, you arrive at Frank's office. His door is open, as always, and Frank is sitting reading reports. He looks up when he hears you knock gently on the open door. "Hi, there," he smiles. "Come on in. Take a seat." You thank him and sit in the chair directly across the desk from Frank's own. "So, Ivana tells me you think this is not the time for the new prenthrinsene filtration system. I'm kind of surprised. You compliance folks are almost always in favour of anything that helps us follow rules or even get ahead of them," says Frank. "Tell me a bit more about your reasoning." You pause for a moment to gather your thoughts, and then respond: "Well, the [[main thing is the cost|the cost Frank]]. This is cutting edge technology, but it's also really expensive technology. And I know our budgets -- in Compliance but also across the company -- are pretty tight." or "Well, the main thing is that we are already [[well within legal limits|legal limits Frank]] for prenthrinsene. Or within them, at least. So there's no need from a regulatory point of view. Our system is already pretty clean. Installing the filtration system now might be an overreaction." or "Well, the main thing is that [[our competitors aren't doing it.|competitors Frank]] I've spoken to colleagues at a bunch of other companies, and their thinking is that if the government isn't requiring it, they're not doing it. So this system isn't exactly industry-standard yet."

Frank smiles, and leans back in his chair. "I'm always happy to hear when my people are cost-conscious!", he laughs. "That's terrific. If we spend too much on something, then there's too little left at the end of the day for something else. I'm glad you see this -- too often people get stuck in their narrow world, and don't see the big picture." He looks out the window thoughtfully, then back at you. "But -- just for a minute -- let me worry about the cost. What's your thinking from a pure regulatory compliance point of view?" You respond: "Well, from a compliance point of view we are already [[well within legal limits|legal limits Frank2]] for prenthrinsene. Or within them, I guess you'd say. Maybe not well within them. But within them. So there's no need from a regulatory point of view. Installing the filtration system right now might be an overreaction." or "Well, the main thing is that the filtration isn't industry-standard. [[Our competitors aren't doing it.|competitors Frank2]] I've spoken to folks at a bunch of other companies in the region, and their thinking is that if the government isn't requiring it, they're not doing it."

Frank smiles, and leans back in his chair. "That's very reassuring," he says. "That's terrific. I insist that we always comply with the law, as a very minimum." He looks out the window thoughtfully, then back at you. "But -- and I know you'll agree with me, given your background -- the law really is a minimum standard in terms of the environment. We want to be a good company, not just one that follows the law. Our stakeholders demand more. Shouldn't we try to do a bit better than just doing what's legal?" Frank tilts his head and smiles. He seems genuinely curious about your answer. You respond: "Oh I totally agree. The bare legal minimum isn't what we should aim for. But I've also been thinking about the cost. Prenthrinsene isn't our only priority, even just from the point of view of environmental compliance. [[Maybe this new technology is just too expensive, given all of our other priorities|the cost Frank2]]." or "Well, the main thing is that the filtration isn't industry-standard. [[Our competitors aren't doing it.|competitors Frank2]] I've spoken to folks at a bunch of other companies in the region, and their thinking is that if the government isn't requiring it, they're not doing it."

Frank smiles, and leans back in his chair. "That's terrific," he says, "that's very useful insight. It's always good to know what the competition is up to, and how industry standards are evolving." He looks out the window thoughtfully, then back at you. "But I'm not entirely satisfied with the idea of just following the herd. Shouldn't we try to do a bit better than merely doing what everyone else is doing? Couldn't we distinguish ourselves by taking a leadership role?" Frank tilts his head and smiles. He seems genuinely curious about your answer. You respond: "Oh I totally agree. Keeping up with our competitors isn't all that we should aim for. But I've also been thinking about the cost. Prenthrinsene isn't our only priority, even just from the point of view of environmental compliance. [[Maybe there's good reason why others aren't adopting this new technology -- it's just too expensive, given the small benefit|the cost Frank2]]." or "I see what you mean. If we make this investment now, rather than waiting, not only do we improve environmental performance, but we have an opportunity to look good in the eyes of regulators -- we'll stand out, which may even mean they cut us some slack in other areas. I'm beginning to think I was looking at this wrong. [[We should invest in the new technology.|change of heart]]

Ivana sits back and looks at the ceiling. She seems to be thinking through what you've said. "I get it," she says. "But we're talking about a pretty expensive piece of equipment, here. Where is the money going to come from? I mean, I can talk to Frank about it, but it's not like we are rolling in cash right now." You respond: "I know you want to do the right thing. And I don't think you can [[put a dollar figure on doing the right thing|dollar figure]]. or "I know. It's not a great time to do this, financially, but we're doing to have to do it eventually. We should [[invest now, rather than pay later|invest now]]." or "I know. It's a [[bad time to do this, financially|bad time]]."

"OK," says Ivana. "Fair enough. I'm not sure 'a bit of cost' is actly right -- it's a big cost! But maybe I can pitch it to Frank in terms of being the right compromise between cost now and cost later, as well as cost versus social responsibility." Ivana pauses, and looks you in the eye. "So you're sure this is the right move? You stand behind this recommendation?" "Yes," you say. "I think this is the [[right move|right move]]." or "Maybe I'm not so sure. Let me [[give it some more thought|more thought.]]"

"Yes," says Ivana. "That makes sense. And Frank sincerely believes in doing the right thing. Maybe I can pitch it to Frank in terms of being the right compromise between cost now and cost later, as well as cost versus social responsibility." Ivana pauses, and looks you in the eye. "So you're sure this is the right move? You stand behind this recommendation?" "Yes," you say. "I think this is the [[right move|right move]]." or "Maybe I'm not so sure. Let me [[give it some more thought|more thought.]]"

"Look," says Ivana. "We can't think of this only through an ethics lens. We've got to stay in business, to keep all our stakeholders even partly satisfied. But maybe I can pitch it to Frank in terms of being the right compromise between cost now and cost later, as well as cost versus social responsibility." Ivana pauses, and looks you in the eye. "So you're sure this is the right move? You stand behind this recommendation?" "Yes," you say. "I think this is the [[right move|right move]]." or "Maybe I'm not so sure. Let me [[give it some more thought|more thought.]]"

"OK," says Ivana. "Fair enough. It's an investment we're going to have to make eventually. But maybe I can pitch it to Frank in terms of being the right compromise between cost now and cost later, as well as cost versus social responsibility." Ivana pauses, and looks you in the eye. "So you're sure this is the right move? You stand behind this recommendation?" "Yes," you say. "I think this is the [[right move|right move]]." or "Maybe I'm not so sure. Let me [[give it some more thought|more thought.]]"

"Yes," says Ivana. "That makes sense. And Frank is acutely aware that the government is under pressure on environmental issues. Maybe I can pitch it to Frank in terms of being the right compromise between cost now and cost later, as well as cost versus environmental responsibility." Ivana pauses, and looks you in the eye. "So you're sure this is the right move? You stand behind this recommendation?" "Yes," you say. "I think this is the [[right move|right move]]." or "Maybe I'm not so sure. Let me [[give it some more thought|more thought.]]"

"Look," says Ivana. "Frank is no fool. He's acutely aware of competitive pressures, but he's also very aware of the regulatory risk here. There's no way he has his head in the sand. Insulting a man like Frank is not professional behaviour. I suggest you rethink your approach." Ivana pauses, and looks you in the eye. "So you're sure this is the right move? You stand behind this recommendation?" You think about it for a moment, realizing that you've maybe overstepped. "Yes," you say. "I really do think this is the [[right move|right move]]." or "Maybe I'm not as sure as I thought. Let me [[give it some more thought|more thought.]]"

As you stand up to leave her office, Ivana says, "Great. I'll write a memo to Frank outlining our recommendation." "Thanks," you say. "Sounds good! Thanks for your support on this." You turn and leave Ivana's office, and smile to yourself as you walk down the hallway. You're proud of having nudged the company in the right direction. It's the end of the day. So you grab your bag and travel mug from your desk, and [[head home|head home]]

So you spend the day thinking about it. You re-read some of the most recent literature on prenthrinsene, and on the new technology available to reduced the levels of prenthrinsene in industrial wastewater. You shake your head at the cost involved -- it really is a lot of money. But then, this really is an important move for the company to make. Do you: Email Ivana and tell her, "I think the investment, while desirable, [[is not necessary at this point|not necessary]]." or Email Ivana and tell her, "I think the investment should go ahead. [[Now is the time|go ahead]]."

A month later, you arrive at work one morning to find an "all staff" memo in your email inbox. It says, in part: <blockquote>As a result of recent exceptional expenditures, combined with a downturn in the secondary market for specialty plastics, TRS Polymers Ltd. finds itself in unusual and unexpected financial difficulties. As a result the management hereby announces with great regret that we will be downsizing our workforce by approximately 5%. Unfortunately this means letting go valuable employees, including some who have given TRS many years of faithful service. The employees listed below should report to HR immediately to sign termination papers and to receive career transition counselling.</blockquote> You realize, of course, that 'these things happen.' No one can say the layoffs are your fault. Markets have ups and downs, and companies lay off workers all the time. And besides, it's not like you got to make the decision: Ivana took it 'upstairs,' and Frank signed off on it. Still...you wonder what role the investment in pollution abatement -- the investment you recommended -- played in hurting the company's financial situation, and in putting dozens of people out of work. You're happy, though, about the reduction in prenthrinsene levels -- according to the government's random testing, TRS Polymers now has the lowest prenthrinsene emission levels in the region. You head to your desk, settle in, and get down to work. [[The end.|End]]

The story you've just experienced, and helped write, is fictional, but far from unrealistic. The multiple values at play in business decision-making are real, as are the multiple factors that come into play even with regard to a narrower realm of decision-making, such as regulatory compliance. Further, it's important to realize that making a decision, or providing a recommendation, is a complex process of not just making and decision and putting it in writing, but explaining to another human being the reasons for your decision. When you read a business case, or read about a complex business decision in the media, it's worth thinking about not just what you would do or recommend, but how you would explain your decision or recommendation to your boss, or to the public at large. At this point, you can feel free to close your browser, or to to [[go back to the beginning and explore a different path through this story|Start]].

You get an email back from Ivana almost immediately: <blockquote>Great. I'll write a memo to Frank outlining our recommendation, and mentioning your role.</blockquote> You smile to yourself as you tidy up your desk. You're proud of having nudged the company in the right direction. It's the end of the day. So you grab your bag and travel mug, and [[head home|head home]].

Frank nods, and seems satisfied by this. "OK, you've convinced me! When Ivana told me I was pretty sure you'd have good reasons. I always like to go into things with my eyes open." He pauses, and then adds: "I'm as environmentally sensitive as the next guy. But if the new system is unnecessary from a regulatory point of view, and expensive, well then maybe it's not time to dive in just yet. Anyway, thanks for your attention to this issue, and thanks for taking the time to come and see me." You thank him for his time, and [[leave Frank's office|leave Frank's office]]

Frank nods, and seems satisfied by this. "OK, you've convinced me! When Ivana told me I was pretty sure you'd have good reasons. I always like to go into things with my eyes open." He pauses, and then adds: "I'm as environmentally sensitive as the next guy. But this new system is quite expensive, and if no one else in the industry is making the move, well then maybe it's not time to dive in just yet. Anyway, thanks for your attention to this issue, and thanks for taking the time to come and see me." You thank him for his time, and [[leave Frank's office|leave Frank's office]]

It's the end of the day. So you grab your bag and travel mug from your desk, and [[head home|head home2.]]

Not quite two weeks later, you spot an email press release from one of your competitors, PolyPhase, bragging about the company having installed a new, cutting-edge prenthrinsene-abatement system. The press release insists that this makes PolyPhase the industry leader not just in quality, but in environmental standards and in social responsibility more generally. You wonder whether your advice not to invest was the right one. All of your reasons still apply, really -- one competitor diving in and investing in the technology doesn't erase all of your reasoning. But still. It makes you think. You close your email, and [[get back to work.|Government action]]

"But -- and I know you'll agree with me, given your background -- the law really is a minimum standard in terms of the environment. We want to be a good company, not just one that follows the law. Our stakeholders demand more from us. Shouldn't we try to do a bit better than just doing what's legal?" Ivana tilts her head and smiles. She seems genuinely curious about your answer. You respond: "Well, for me I think the main thing is that the filtration isn't industry-standard. [[Our competitors aren't doing it.|competitors Ivana3]] I've spoken to folks at a bunch of other companies in the region, and their thinking is that if the government isn't requiring it, they're not doing it. It's one thing to go beyond what the law requires, but it's another thing to take on additional costs that no one else is taking on." or "I see what you mean. If we make this investment now, rather than waiting, not only do we improve environmental performance, but we have an opportunity to look good in the eyes of regulators -- we'll stand out, which may even mean they cut us some slack in other areas. I'm beginning to think I was looking at this wrong. [[We should invest in the new technology.|change of heart Ivana]]

"I see what you mean. If we make this investment now, rather than waiting, not only do we improve environmental performance, but we have an opportunity to look good in the eyes of regulators -- we'll stand out, which may even mean they cut us some slack in other areas. I'm beginning to think I was looking at this wrong. [[We should invest in the new technology.|change of heart Ivana]] or "Well, from a compliance point of view we are already [[well within legal limits|legal Ivana3]] for prenthrinsene. Or within them, I guess you'd say. Maybe not well within them. But within them. So there's no need from a regulatory point of view. Installing the filtration system right now might be an overreaction."

Frank nods, and seems satisfied by this. "OK, you've convinced me! When Ivana told me, I was pretty sure you'd have good reasons. I always like to go into things with my eyes open." He pauses, and then adds: "I'm as environmentally sensitive as the next guy. But this new system is quite expensive, and if no one else in the industry is making the move, well then maybe it's not time to dive in just yet. Anyway, thanks for your attention to this issue, and thanks for taking the time to come and see me." You thank him for his time, and [[leave Frank's office|leave Frank's office]]

Frank nods, and seems satisfied by this. "OK, you've convinced me! We'll make the investment." He says it with a wink, knowing that it's him that has actually convinced you. You stand up, and get ready to leave Frank's office. "Oh, one more thing," he says. "Please put the decision in a memo. Email that to me for approval, and cc Ivana too. We have to keep her in the loop." "Will do!" you say. You thank him for his time, and [[leave Frank's office|leave Frank's office2]]

You rush back to your office -- it's the end of the day, and you're anxious to head home. You quickly type out an email recommending adopting the new prenthrinsene abatement technology. You address it to Frank, being careful to cc Ivana as well. You click [[send|send email]] and head home for the day.

Sixty seconds later, as you're packing up your stuff to leave, you're just about to close your laptop when you spot an email back from Ivana. <blockquote>What? You've changed the recommendation? You and I had agreed that we would recommend not investing in the new technology at this point. Now you're going the other direction, without consulting me? You're making me look like I'm not on top of this file, and I don't like it. If this project goes badly, it's on your head. You're on your own.</blockquote> You're not sure what to think now. You're proud of having nudged the company in the right direction, but you never intended to make Ivana angry in the process. You'll have to think about this, before responding, if you respond at all. It's the end of the day. So you grab your bag and your travel mug, and [[head home|head home]]

"Yeah, the costs are substantial," says Ivana. "But we can't just focus on that. That's big-picture stuff that's really my boss, Frank's, job. We need to focus on the regulatory environment. What do things look like from that point of view?" You respond: "Well, for me I think the main thing is that the filtration isn't industry-standard. [[Our competitors aren't doing it.|competitors Ivana7]] I've spoken to folks at a bunch of other companies in the region, and their thinking is that if the government isn't requiring it, they're not doing it. It's one thing to go beyond what the law requires, but it's another thing to take on additional costs that no one else is taking on." or "I see what you mean. If we make this investment now, rather than waiting, not only do we improve environmental performance, but we have an opportunity to look good in the eyes of regulators -- we'll stand out, which may even mean they cut us some slack in other areas. I'm beginning to think I was looking at this wrong. [[We should invest in the new technology.|change of heart Ivana]]

Ivana nods, and seems satisfied by this. "OK, you've convinced me! We'll recommend making the investment." She says it with a wink, knowing that it's her that has actually convinced you. As you stand up to leave her office, Ivana says, "OK, then, I'll write a memo to Frank outlining our recommendation." "Thanks," you say. "Sounds good! Thanks for helping me figure this one out." You turn and leave Ivana's office, and smile to yourself as you walk down the hallway. You're proud of having nudged the company in the right direction. It's the end of the day. So you grab your bag and travel mug from your desk, and [[head home|head home]]

Ivana thinks for a moment, then pauses. "OK, good enough," she says. "I think between the cost and the competitive landscape, we've got a strong grounding for a solid recommendation here." As you stand up to leave her office, Ivana says, "Leave it with me. I'll write a memo to Frank outlining our recommendation." "Thanks," you say. "Sounds good! I appreciate your support on this." You turn and leave Ivana's office, and smile to yourself as you walk down the hallway. You're proud of having nudged the company in the right direction. It's the end of the day. So you grab your bag and travel mug from your desk, and [[head home|head home3.]]

Ivana smiles, and leans back in her chair. "That's terrific," she says, "that's very useful insight. It's always good to know what the competition is up to, and how industry standards are evolving." She looks out the window thoughtfully, then back at you. "But I don't think we should be entirely satisfied with the idea of just following the herd. Shouldn't we try to do a bit better than merely doing what everyone else is doing? Couldn't we distinguish ourselves by taking a leadership role?" Ivana tilts her head and smiles. She seems genuinely curious about your answer. You respond: "Oh I totally agree. The bare legal minimum isn't what we should aim for. But I've also been thinking about the cost. Prenthrinsene isn't our only priority, even just from the point of view of environmental compliance. [[Maybe this new technology is just too expensive, given all of our other priorities|the cost Ivana6]]." or "I see what you mean. If we make this investment now, rather than waiting, not only do we improve environmental performance, but we have an opportunity to look good in the eyes of regulators -- we'll stand out, which may even mean they cut us some slack in other areas. I'm beginning to think I was looking at this wrong. [[We should invest in the new technology.|change of heart Ivana]]

"Yeah, the costs are substantial," says Ivana. "But we can't just focus on that. That's big-picture stuff that's really my boss, Frank's, job. We need to focus on the regulatory environment. What do things look like from that point of view?" You respond: "I see what you mean. If we make this investment now, rather than waiting, not only do we improve environmental performance, but we have an opportunity to look good in the eyes of regulators -- we'll stand out, which may even mean they cut us some slack in other areas. I'm beginning to think I was looking at this wrong. [[We should invest in the new technology.|change of heart Ivana]] or "Well, the main thing is that the filtration isn't industry-standard. [[Our competitors aren't doing it.|competitors Ivana9]] I've spoken to folks at a bunch of other companies in the region, and their thinking is that if the government isn't requiring it, they're not doing it."

A month later, you arrive at work one morning to find an an email from Frank in your inbox, cc'd to Ivana. It says, in part: <blockquote>Just received a very official email from government folks. I'm reading between the lines, but it sounds like they're under pressure from environmental groups. They say we've got to reduce prenthrinsene levels in our wastewater even further. Rather than letting us figure out how to do so, they're requiring that expensive filtration system we decided against last month. Oh and -- you'll love this (not) -- they want us to submit daily (yes daily!) reports on our prenthrinsene levels, for the next 6 months. After that they say the'll "re-evaluate." Ugh! This is not good timing. Quarterly sales figures came in last week, and they're pretty soft. We really don't have the cash for additional expenses. Please prepare a report for me on where we can cut costs to compensate, and focus on other areas of compliance where we can trim some fat.</blockquote> You realize, of course, that 'these things happen.' No one can say the it's your fault that the company is now facing additional costs. But still. You know that when a CEO says "look for where we can trim fat," that often means "look for people we can fire." Frank is pretty loyal to the people who work for him, but realistically you know that his loyalty has to have limits. You're pretty sure you're happy, though, about your role in the decision -- you gave Frank the advice you thought he needed, based on a full appreciation of the technical details and the best interests of the company. You head to your desk, settle in, and get down to work. [[The end.|End]]