This is what it usually looks like when FinTech founders or CEOs micromanage compliance:

• In response to a compliance/audit recommendation they don’t like, they request comprehensive research of the topic, comparison tables, and a full list of applicable regulations. It is usually clear from the context that the founder/CEO wants to find a different alternative or otherwise overrule the recommendation, but they don’t say it directly.
• Spending hours editing and questioning the last version or final draft of the document before it goes out.
• Suddenly expanding the scope of the compliance tasks by adding additional requirements such as “What happens if we scale to 1 million users?” or “How does it apply if we launch a new product in a different country?“.
• Hiring external advisers or consultants to review the past work done by the compliance team, when their head of compliance does not recommend it or does not find it necessary.
• Constantly checking for status updates but then making a unilateral decision.

Why does it happen?

• Most founders are not mean or abusive, they just confuse perfectionism with professionalism and misunderstand how they can actually contribute. 
• Sometimes, they feel they can do the job much better than anyone else on the team, jump into the task (thinking they are helping because things are not moving fast enough), and don’t realize that their actions are very demotivating and disempowering.
• Under-confident inexperienced founders, especially if they are a bit younger than their compliance leader, struggle with getting people to take him or her seriously. This lack of confidence translates to them misguidedly micromanaging to make sure their team responds to their authority.
• Very often, founders cannot articulate their expectations very well in advance, and once they see the project or the research is not going where they originally intended to, they don’t explain that there was a misunderstanding and just start course-correcting the project.
• Many founders and entrepreneurs (myself included) have ongoing fears and anxieties about not making it big, not growing fast enough, not being on track toward the goal, and not being able to raise funds again (…) Sometimes the only solution out of this fear feels like you need to take over control and do everything yourself (“If you want something done well, do it yourself”).
• In some cases, founders are just incompetent or inexperienced as CEOs, but they feel very comfortable doing what they do best (coding, marketing, and sales negotiations). They just want to be seen as an expert in something they know how to do.

Did you notice something similar? How do you deal with it? 😉

Prefer to listen to this content instead of reading? Then tune in to this podcast episode of Compliance That Makes Sense.🎧

🚀 Did you know that I launched an ongoing support program Second Opinion for FinTech leaders?

Second Opinion is designed for FinTech entrepreneurs and senior FinTech and Compliance leaders who would like to have a reliable consistent partner available to provide you with a second opinion, quick feedback, or a review of a situation, especially in cases where you don’t have the right expertise in-house. It could also be a form of a FinTech compliance mentorship, for those professionals who are determined to overcome their current performance plateau and require support and accountability while navigating critical decisions or pivoting in business. 

Second Opinion support is the right fit if some (or many) of the following is true for you:

• Your compliance team is too junior or narrowly focused and cannot quickly address and solve more complex, rare, or unusual cases, audit issues, or partner inquiries.
• You are facing hard choices or major uncertainties in your current business (team restructuring, loss of a partnership, difficulties with fundraising, unfavourable regulatory feedback) and you find it hard (or it takes too long) to make decisions or see the big picture.
• You are a FinTech founder and you find it too overwhelming and difficult to manage your compliance team. Possibly, you are observing everyone else in the company willing to spend money on new hires or new tools, or new consulting… But they are not the ones who do the fundraising and don’t actually realize how hard and uncertain the next funding round can be… You are trying to empower your team and delegate more decisions to them, but having nevertheless all important decisions escalated back to you… You know that more money or more resources cannot be the only solution.
• Every time there is a problem or a delay, the diagnosis is that this project needs better “ownership” and better communications, however, when a dedicated owner is allocated or hired to drive the project, not much changes. You are listening to complaints or “constructive feedback” from your leadership team about each other, knowing it’s counter-productive but unable to put an end to this…

✨ Please reach out if you know you need a Second Opinion because you don’t like any of your current options 😉