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News & Press: Blog

The Problem with Governance

24 February 2020   (1 Comments)
Posted by: Andrew Craddock
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The problem with Governance is that it is seen by most as a necessary evil that has been thought up by naive do-gooders and is policed by narrow-minded jobsworths. Furthermore, many hold the opinion that neither of these groups really understand what it means to operate in the “real world” and that they seem hell-bent on getting in the way of doing just that.

In reality there seems to be more than a little truth to that in many organisations who have governance structures and processes not suited to our VUCA world – a world characterised by Volatility, Uncertainty, Complexity and Ambiguity.  There is rarely smoke without fire and what is usually at the heart of the matter is a fundamental misconnect between the intention of Governance and the way it is typically implemented.

To fix this misconnect, we need to review what governance is, or perhaps what it should be, and recast the machinery of Governance in a way that is sensitive to our VUCA world and allows organisations to be responsive, adaptive and innovative in the face of challenges from customers, stakeholders and legislators alike. 

The terms Agile and Agility have grown from their roots in Software Development to become common parlance in the board room, often as shorthand for doing a better job faster and cheaper.  However, that simplistic view undermines both the business potential and the operational effectiveness of Agility. 

The Agile philosophy runs much deeper than that and emphasises the importance of collaborative endeavour over process-compliant activity, delivery of value over the detailed debate around it, and doing the right thing over doing what was agreed at the outset.  It is actually the adoption of new Agile ways of working that deliver the desired ‘better, faster, cheaper’ outcomes.

Achieving Agility in business is often hampered by a philosophical mismatch between a modern, flexible and empowered approach to getting things done and traditional mechanisms for both governance and regulatory compliance that assume a VUCA-denying predictability of both the outcome of a given endeavour and the ways of working required to achieve it.

Governance should be about ensuring an organisation is aligned around doing the right thing in the right way.  Here, the term organisation can be applied to a whole business (whether that is a company, a public body or a charity) or a subset of that business (whether that is an operational group, a support function or a project/development team). 

Effective governance combines elements of ‘direction’ of an organisation to guide both purpose and ways of working, with ongoing monitoring to ensure that these are being respected.  Agility in Governance is needed to support Agility in business and, to do so, must not be unnecessarily restrictive.  It can and should work to the advantage of a business rather than get in its way.  This can only be achieved through effective empowerment of people who are fully aligned around the intent of the organisation

A working definition of governance that would suit an Agile business or one with such aspirations is, therefore:

“A light-touch, flexible approach to ensuring that the activities
of an organisation remain aligned to the values and intentions of its sponsors”

To achieve this Agile Governance should be universal, pervasive and scalable around values that support:

 

Radical Transparency over Subjective Bureaucracy

There is a need to replace turgid reporting, and the often-realised risk of misinformation associated with a parallel world of pro-forma documentation, with absolute transparency of practice.  Where required, for purposes of audit and the demonstration of compliance with legal and other standards, contemporary records should, of course, be made and retained.  Transparency should be radical in that such records should be totally objective – context can be provided as a parallel commentary but the record itself should be clear, factual and free of spin.

 

Trusted Autonomy over Hierarchical Control

Human beings are differentiated from the rest of the animal kingdom primarily by our ability to solve complex problems both individually and, at scale, collectively.  All too often, corporate policies and procedures act to supress this innate capability in an attempt to turn us into unthinking drones, programmed to a single purpose.  Trusted, self-organising, autonomous human collectives who are aligned around a common purpose and a shared understanding (rather than just knowledge) of necessary standards and constraints will always out-perform pre-programmed hierarchically controlled drones.  Organisations that will thrive in the 21st century will do so by unleashing the human potential of their people.

 

Collaborative Responsiveness over Diffuse Deliberation

To be responsive to the turbulence of a VUCA world, organisations need the ability to think on their feet.  The best and most rapid decisions are made by those closest to the event that requires the decision to be made because the individuals concerned are, or through an advice process can be, best informed by the facts and imperatives in play.  Organisations where hierarchical control trumps trusted autonomy and where decision making is restricted to small groups of senior people at a distance from the event, however wise and experienced they may be, will be disadvantaged in a world where dynamic responses to external conditions are required

Given the volatility, uncertainty, complexity and ambiguity of our 21st century reality can your organisation risk hampering the Agility required to survive and thrive with unnecessarily restrictive mechanisms of governance designed in and for a 20th century world?  Or is now the time to explore, define and test a modern, dynamic and Agile mode of governance to unleash your organisation’s untapped potential?

Comments...

Stephen Goodwin says...
Posted 27 June 2020
Good article - if you have decent metrics that are focused on the objectives and value, it is possible to have good governance. Agree the metrics that matter. What is the 'currency' of 'goodness' for your endeavour Communicate in those metrics at all times - sounds a bit like being benefit-focused Restrict those governing the process to monitoring those metrics, evaluating changes needed to keep them coming and directing to protect them. Three verbs of governance - Monitor, Evaluate, Direct (see that doesn't include those governing getting caught up in detail and doing...)

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