The compass is used to generate random directons. It has two parts.
The outer part looks like the regular colored pointer of a normal compass. The white end points in a random direction, distributed among the four cardinal directions and their four intermediates (i.e. N, S, E, W, NE, SE, SW, NW). This is intended for use with square-paper maps. If you do not wish to allow diagonal movement, then simply draw more cards until a cardinal direction comes up.
The sunken inner bevel of the compass generates random directions for hex based maps. It is distributed among the six adjacent directions. This element assumes your grid is arranged with hexes arranged in vertical columns. If your grid is arranged as hex rows, then turn the cards ninety degrees counter-clockwise (if you hold the card in two hands by the number-and-suit markings, this is the natural direction to rotate it).