Ask anyone in business, large or small, what their biggest headache is and they will invariably tell you that it is red tape. The very phrase suggests being bound or tied up by unnecessary restrictions; made unable to do one’s job and held back by complex, ever-unwinding obstructions. No wonder that many instinctively wish that red tape could be done away with entirely, cut through as swiftly as possible so that businesses can get back to work.
Unfortunately, it is not that simple. Red tape is another word for regulatory compliance, and government or local authority regulations are generally in place for good reason. All businesses, including competitors, have to comply with them, and ultimately the key to cutting red tape is not to try to avoid it but to meet it head on, and to adopt the same pro-active, can-do attitude that one would expect in any other area of business.
Make red tape work
A well-run business is a compliant business, and meeting regulations efficiently can actually be a source of competitive advantage, innovation and even profit. Sometimes the sheer volume of red tape can seem overwhelming, but by focusing management attention on the critical points and developing simple systems to deal with the rest, a business can sail through. With this attitude, a business may choose to go the extra mile and move beyond mere box ticking. Standing within an industry can also be greatly enhanced by a firm leading the way on such important regulatory matters as health and safety, product quality, good business practice and environmental sustainability.
The main difficulty with red tape however is often not the regulations themselves, but government departments that, for whatever reason, are not efficient in making quick decisions, rubber-stamping applications and providing acknowledgement. These delays can cost businesses money, and new enterprises may find themselves sunk before they have even begun, as waiting for one decision can hold up applying for a permit in another area, and authorities do not always make clear the actions required by a new business. The penalties for non-compliance can range from warning notices to legal action and even personal liability claims against directors.
In such matters it is sometimes best to seek outside legal advice. DLA Piper has a formidable reputation in addressing a wide range of challenges for international commerce and business, including global tax issues and compliance. One look at CEO Bob Bratt’s resume will show his qualifications for the role; Bratt served with the US Department of Justice for 22 years before beginning a successful business career. As such, DLA Piper is able to see regulatory compliance from both a business and a government point of view, and is able to advise firms on their obligations with confidence.
A good business should not ignore red tape, or get it out of the way quickly as an afterthought, but should meet it like any other challenge, making regulatory compliance central to its day-to-day activities. Cutting red tape is about managing it effectively, and if necessary making a change in business culture and attitudes in order to do so.