Episode Transcript
[00:00:00] Speaker A: Hi everyone. In this episode, we'll look at how the ethics and compliance team at Phillips 66 makes measurement and metrics a key ingredient of their program success. I'm your host, Bill Coffin. Welcome to the Ethicast.
Phillips 66 is a Fortune 500American multinational headquartered in Houston, Texas.
It is a global leader in the energy industry, specializing in petrochemical refining, transporting marketing and research and development.
It also supplies and provides marketing support to filling stations across the United states under the Phillips 66, Conoco and 76 brands.
As a public company, a major multinational, and a member of the heavily regulated energy industry, Phillips 66 has significant corporate compliance obligations to uphold.
And that makes measuring and reporting program efficiency absolutely crucial to the program's success.
And under the Metrics that matter initiative, the Phillips 66 Ethics and Compliance team has created a robust data ecosystem that empowers and advances its program.
With us today to talk about this is Kristen Andrade, manager, Office of Ethics, and Tom Lusak, Senior Advisor, Ops, Data Reporting and Tech. Both represent the global ethics and compliance team at Phillips 66. Guys, welcome to the program. It's great to see you.
[00:01:31] Speaker B: Hi Bill. Thanks for having us.
[00:01:32] Speaker C: Thanks, Bill. Excited to be here.
[00:01:35] Speaker A: Now, before we get started, one of the things I think is so cool about companies like Phillips 66 is how it manages to touch, you know, life in so many ways that people don't always expect. So I'm kind of curious, what's a product that might, that people might have in their homes that, that they, they, they wouldn't necessarily realize is something that Philips 66 helped to manufacture?
[00:01:54] Speaker B: That's a great question, Bill.
Everyday cosmetics that women use in their homes or kids that use them. Right. That's a very common product that uses a lot of our products as well.
[00:02:05] Speaker C: What, what isn't there? I mean, your carpet, your upholstery, non stick pans and I mean we wouldn't want to live, you know, modern day life without it, that's for sure.
[00:02:14] Speaker A: Indeed. Indeed.
[00:02:15] Speaker B: Indeed.
[00:02:15] Speaker A: Well, Tom, let's, let's just start with you. When Phillips 66 brought on a new chief compliance officer, one of their first asks was a picture of the program's performance. And as I understand it, what they got was sort of an avalanche of disconnected data that didn't really add up to much of a story.
And I understand that sparked the Metrics that Matter initiative. So can you walk us through what that's actually trying to solve and what it looks like in practice?
[00:02:41] Speaker C: Yeah, so.
Or what we call our Metrics that Matter Journey We've been on it for 18 months now. But the context behind that journey actually started About a year plus before that time, when Philip666 onboarded new chief compliance officer. And one of the first things they needed was, you know, a clear picture of how our global ethics and compliance program was performing.
And the challenge with that wasn't a lack of data. You know, we had plenty of data. It was that it was coming in by so many different formats. I mean, we're getting Excel workbooks and PowerPoint slides, summarized emails. We had a couple standalone Power BI dashboards. And on top of that, several of the teams would send in multiple revisions as they had to adjust and correct some of their figures. So there was a lot coming in. I remember seeing a file at the time, it was an Excel file, and it was named something like final in all caps, underscore V7 for real this time xlsx.
So, I mean, that gives you a true sense of where we were. Yeah, but we had a second issue, you know, not just the format, but we weren't really telling a story to our chief compliance officer at all. We were turning in all these data visuals, but no narrative that tied everything together. So they were having to spend all of their time going through the visuals, trying to figure out what changed and why it mattered, you know, what was measuring risk or what was showing value, you know, what was worth taking to the board or to an executive leadership conversation. And Bill, I think you and I can both agree that, you know, our chief compliance officers have much better ways of spending their time than to reverse engineer program story out of disconnected quarterly metric files. And so that's what Metrics that Matter is trying to solve. We knew we needed a process that was more consistent, accessible, visible, and ultimately more informative.
So we started with dashboards. We landed on Power BI as our.
Our common reporting platform. Just because our company already had support in place, we had licenses in place. It was actually a practical way to get all of our teams working from the same tool set.
We assigned a point person from each of our GC teams, basically a Power BI rep, and we got them trained. And to their credit, it only took a quarter for them to get the team's dashboards built and published.
As nice as those dashboards were, and they were, they were great. We got tons of good feedback from them. But we realized right away that wasn't our finish line. That was more of a starting point. And what we were really looking for was maybe an entire data reporting ecosystem, if you will, that would help us tell a much more efficient story.
At that point, we had the dashboards built, combined them all into a single Power BI app. That's essentially one place that our chief compliance officer and the GC group could go to see metrics across it.
That was a big shift for us. Our chief compliance officer now had a single point of access, and the broader GC group could start seeing metrics across other teams, which isn't something we had before. We didn't have that visibility.
And from there we added on training, targeted training dashboards for each of the teams, KPI dashboards for each of the teams. And over time, that ecosystem started moving the conversation from what happened to how are we doing and why does it matter?
And at that point, our data foundation was built. And then later in our journey, we were able to use that foundation to help tell a more meaningful GC wide story that was supported by trends and drivers and insights and eventually an AI assisted narrative.
[00:06:04] Speaker A: Tom, as you built out this unified reporting ecosystem, did that new visibility ever surface something like a risk or a gap or an opportunity that you think probably would have stayed hidden under the old approach?
[00:06:15] Speaker C: I mentioned those training dashboards a minute ago, and that's probably a great example there. Once we combined all the dashboards into a single Power BI app and everything is in one place, it became real clear that none of our teams were reporting on targeted training.
Many times they weren't even keeping track well enough to report clearly at all. And that was real important to us because our team over the last two and a half years or so has really stepped up the amount of targeted training that we're providing to different functional areas across the company. So the work was happening, but it wasn't really showing up in our metric stories. So that's an opportunity that present itself. So we had each team start keeping a simple training look. You know, if they had this targeted training, when did it happen?
Who attended? In other words, how many and what business units and what locations? And was this proactive training or reactive training? And finally, you know, how did we present it with? What was the format? Was this an online training? Was it in person? Maybe a mix of both.
And once we consistently started collecting that information, it was really easy to launch these targeted training dashboards. Those dashboards now show our reach, our engagement, our reinforcement across the business.
And then it gets better. If you pair that training data with our, the rest of our metrics, our operation, our programs, metrics, you can start asking better questions. Is our training influencing behavior? You know, our employees using the correct reporting channel? Are we seeing fewer repeat issues, or do we need to make our training more relatable, you know, easier to understand, maybe change the format? And so, Bill. Yeah, I would definitely think that's a great example. Something that probably would have stayed hidden under our own reporting system.
[00:07:51] Speaker A: Kristen, I understand that there's a quarterly process where your teams dig into the data together, looking for meaningful trends. So can you walk me through that? Like, how do you interrogate your own data?
[00:08:01] Speaker B: How do you.
[00:08:02] Speaker A: How do you decide which trends are worth pursuing? And how do you turn what you find into action?
[00:08:07] Speaker B: Yeah, Bill, it's a great question. So for us, that quarterly review really became a turning point. We had real strong data and strong program knowledge, but we were still just mostly reporting activity rather than telling a clear story about what that data really meant.
So we built a short reflection cycle into that process.
What that consisted of is that each team's power bi metrics are published. That team then spends the following week reviewing that data together and asking a very consistent set of questions in those teams, such as what changed? How does it compare to last quarter or even the same period last year?
Which two or three trends matter most? What's driving them, why do they matter? And what action or value story should come from those changes. And where needed, those teams would validate what they're seeing with any internal stakeholders so that that data is grounded in real business context and not just numbers on a dashboard.
So this really became a game changer for us and how we evaluated our program and absolutely underscored that our program is not operated in a silo and our business leaders are just an extension of our broader ethics and compliance program.
So then we decided as leaders to bring those findings into a leadership roundtable with our chief compliance officer, where we challenged each other's assumptions.
I can speak from experience. We pressure tested the drivers and we sharpened those insights. And that really helped us, as a broader team, decide which trends are really worth pursuing and which are typically the ones tied to emerging risk changes in business activity, policy, training impacts, or clear opportunities to show how our ethics and compliance program is reducing the risk and creating value. And again, I can't underscore enough how this process involved into a team project and initiative that not at the sole discretion of just one person or one leader. And the outcome from that is that we moved beyond reporting basic metrics to producing what we called curated insights. What changed? Why it changed, why does it matter? And what should we do next with that data? And that gives us a more Unified story about global ethics and compliance impact. But it also reinforces our role as a trusted advisor to the business executive leadership and our board of directors.
[00:10:26] Speaker A: Tom, you had mentioned before using AI to help synthesize all this into a narrative that your chief compliance officer can take to the board. What does that look like in practice? Like, what tools are you using, what governance do you have around it, and how do you think about that balance between AI capability and human judgment in that process?
[00:10:45] Speaker C: So that's where our journey really started to come together. I talked about that data foundation. Once that was in place, the next question became, how do we turn all of that into something that our chief compliance officer can actually use as they're preparing for the quarterly board materials? And that's where we introduced an AI support layer. We use a product called Glean. Our company is heavily vetted. It, we have a contract in place, we have licenses in place. In other words, it's not a public AI model.
In addition to that, you know, our broader AI environment here. Phil66, we have heavy, you know, AI or company guardrails in place. We have, you know, a very strong AI policy. We have an AI governance board, we have an AI stewardship committee, just to name a few. So we felt very comfortable putting our ethics and compliance data into the model. So at that point, we uploaded to Glean all of our metrics data and our training data, our KPI dashboards, our trends, our drivers, our insights, and a couple examples of recent board materials that our CCO had presented to the board.
All of that gave it the data in the context and the tone and the structure that we wanted it to have.
Then we gave it a role. We asked it to review all of that information as if it were a board level senior compliance advisor and help us connect the dots. So in simple terms, we're asking it to, you know, connect themes and to combine related team stories into a GEC wide story and then to provide a narrative explorer explaining what happened, why does it matter, and what's the data suggesting about risk and mitigation, program effectiveness, culture, business value. And the output was very helpful. It gave us a new way to look across our team's inputs, you know, reduce duplication, to connect those things that are showing up in different parts of the program. And it helped us frame our story at the right level for a board discussion. And the idea was never to take that output, give it to our chief compliance officer and say, paste this in your board deck. That was never the intent. The intent was to have this very Strong first pass reference that our chief compliance officer can use as they're doing their own board slides using their own judgment and their own understanding of what the board needs to hear.
And so that balance you mentioned, it's simple. In our case, we're really just using AI to organize the data, connect themes and let it suggest a structure. But humans and people still, you know, own and the judgment, let's say, you know, our GEC teams, they own their data and insights and our GEC leadership team comes together, we pressure test the story and then at that point our CCO can decide, you know, what's, what's relatable for a board presentation and what's appropriate. And it's human review that keeps that final message accurate, balanced and appropriately framed. That's really where we are today in our metrics that Matter journey. We've gone from a very disconnected, fractured system that came with almost no story to this Power BI app, this one place that holds all of our teams dashboards in one format. In addition, now we can hand in an AI assisted human reviewed board level reference that our chief compliance officer now use as a tool as they're preparing for any type of board materials.
[00:14:07] Speaker A: Well, speaking of the board, Kristen, I would love to know what is the board's reaction been to this and what is the CCO's reaction been to this? And has this work actually moved the needle on how your program is perceived and supported at the top?
[00:14:21] Speaker B: Yeah, that's a great observation, Bill. I will tell you, in my tenure with the company, I have really seen the evolution of how our program has been represented to the board and what kind of questions, what kind of feedback we've received. And I've got to tell you, the response has been very, very positive from both the board and our Chief compliance officer regarding our change in our approach and how we're presenting our program.
For the board, the value is not just more data, they want the right data. Right?
It gives them better visibility into how we at Phillips 66 assess whether the ethics and compliance program is actually working.
And it helps them understand the company's risk profile in a more practical way.
They've been very engaged, asking very thoughtful questions and have offered useful perspective based on what they are seeing across other boards that they sit on. From the CCO's perspective, the data tells us a stronger story though about the program and positions us as a more proactive strategic advisor to the business.
We're no longer the cops in the room, let's face it, right? We are now becoming a more trusted resource for the company. And that's a very important dispute distinction. Overall, I will say I think the needle has been moved. We set the expectation with both management and the board that this is a data driven program, one that helps us identify, anticipate and manage risk. And as our program continues to mature, we expect to have an even more concrete examples of that value and how that approach is creating that value.
[00:15:49] Speaker A: To somebody who is just entering the ENC space or to somebody who feels perhaps overwhelmed by the role that information now plays in your profession. What are some words of advice that you would give to them with regards to how one can cultivate a healthy relationship with data measurement and metrics in order to succeed as an ethics and compliance professional? Kristin, you want to start?
[00:16:12] Speaker B: Yeah, sure.
I think as an ethics and compliance program, you need to understand the problem you're trying to solve for. You need to understand the data that you have available, but also really understand what KPIs or what metrics best tell your story about your program.
You know, it may not be our metrics that we use, it may be metrics that's best for your company, but it really needs to be able to demonstrate and tell the story of your program. Those are some words of advice I would have.
[00:16:39] Speaker C: Don't do it alone. I mean, you know, make sure you're collaborating and, you know, seeking different perspectives. You know, talking to the team. Sit down with your, your chief compliance officer, you know, what do they want to see? What story are they trying to present? You know, and you'll get used to the term in those discussions alone. You know, stay active in the associations out there with your cco. Try to get feedback when they're presenting to the board. You know, remember the system, whatever you design, whatever you have and wherever you're taking it, it's dynamic and you have to be able to adjust it accordingly as things change and swings.
[00:17:09] Speaker A: Well, Kristen and Tom, thank you so much for joining us today. Where can people go to learn more about the work that you and your team are doing at Phillips 66?
[00:17:18] Speaker B: So I think our LinkedIn profiles would be a best place to start, to reach out to us, starting conversations, Send us an email, send us a message and we'll be happy to reach out.
[00:17:26] Speaker A: Well, guys, it's been a great conversation. I really appreciate you coming on the ethicast and sharing the success story that is the metrics that matter initiative. Phillips 66. Been really great to have you on the show. Thank you so much.
[00:17:37] Speaker B: Thank you.
[00:17:37] Speaker C: Thank you for having us. This has been fun. Appreciate you.
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