Govern Effectively Through Better Organizational Design
Efficient and effective governance of organizational decision-making and strategic planning is at the heart of improving performance. For the purposes of this post, I use the term governance to mean “processes of interaction and decision-making among the actors involved in a collective problem or function that lead to the creation, management, or termination of work.” In simple terms, governance can most often be seen through the lens of various meetings with middle or senior level management that consider and disposition plans regarding the use of personnel and funds to conduct projects or programs.
Governance is a cornerstone for success in any form of organizational change. Analyzing the requirements of constituent stakeholders who need to be a part of any governance model, and designing those governance structures effectively, benefits from a solid foundation in best-practices to know what approach will deliver the highest probability of success in a given situation. By incorporating some of the approaches discussed in this blog, you will be better positioned to:
- Differentiate the requirements and motivating factors among organizational units
- Communicate and defend a decision-making model that everyone can understand
- Effectively balance collaboration, responsibility, and authority among the teams or organizational units impacting the project.
Be clear, be consistent, and be specific
The worst meetings are the ones where we don’t know why everyone is in the room. At some point it may have been clear, but over time the meeting devolved into a combination of sharing information, providing recommendations, and either implied or explicit authority over decisions that are not implemented consistently from one meeting to the next. We see many instances where groups fall into this trap.
Creating a high-performing governance model requires looking at all of the working level and decision-making groups that somehow impact the scope of the project. Each group needs a clear purpose and a clear charter. The challenge lies not in the design of the charter, but in the conduct and facilitation of the various groups to ensure they perform as designed and as expected. There are a few techniques to improve the likelihood that this occurs:
- Before implementing a new or changed governance model, develop scenarios and simulate them with participants representing each group to validate the intended purpose and flow of the model, or how a change in one component might affect other areas.
- Identify and implement reporting and measurement strategies that indicate the health of the governance model. These measurement points can be particularly useful when positioned at key group interfaces, to monitor handoffs and consistency of information flow. Some sample measurement techniques could include:
- monitoring timeliness of decisions relative to the planned date or planned duration
- adherence to established decision making standards as calculated by the % of time that decisions are made through an exception process (which helps assess the adequacy of the underlying standard itself)
- a ‘total time in process’ metric that can assess how long it takes work or a decision to flow through the entirety of the governance process, as well as the length of time associated with each stage along the way
- Invest in dedicated facilitators for each group, and ensure that this support is continuously in place to coordinate across the various groups to optimize workflow and consistency.
Govern the work, not the org chart
Creating an effective governance strategy, and implementing it with success, requires understanding the complexities of the scope of the work. This should be job No. 1, and stands in stark contrast to an assumption that the ‘work’ is somehow tied to the hierarchy of the organization and its reporting relationships. Change flows both vertically and horizontally through an organizational chart. Taking a systems-based approach to understanding the inputs, outputs, and suppliers or consumers to a process will help identify the full set of stakeholders of the work at hand. An organizational chart may demonstrate authority and suggest some level of involvement, but it is not sufficient to gain insight into how formal and informal decisions are made and how the work and information flows through various processes. When performing a stakeholder analysis, you begin to see how engagement across the organizational chart may be imbalanced. This understanding can help you make sense of why particular levels of participation, knowledge-sharing, or buy-in are stymied and impeding effective governance. This analysis can only be refined through careful understanding of the underlying processes, as well as the cultural, interpersonal, and behavioral factors of the individuals at play.
You are not alone, and you are not operating on an island
Successful governance requires that all facets of the decision-making network influencing the desired outcome are aligned and operating effectively. A change to any one piece of that network has the potential for a ripple effect to the other elements. In order to successfully change one or more pieces, this network effect must be acknowledged and analyzed as part of the overall change. For example, think of a simple production line. In many ways, governance processes are like production lines that produce effective decisions (rather than widgets). Changes to the stages of idea generation, definition, maturation, approval, execution, and monitoring/oversight cannot be made in isolation. Each stage influences the other, and frequently in complex and non-linear ways. In order to design for this change, consider the following:
- When working to improve or otherwise modify a single team or group, take time to capture, define, and validate the interdependencies of that group on the broader process and decision-making business environment they are a part of.
- Once validated, ‘stress-test’ any proposed changes to the group to ensure consequences for other groups and teams can be assessed and appropriately incorporated into the overall change plan. This can be done by developing something as simple as representative agenda topics and either using role-play (in a small group) or a review of alternative outcomes (a ‘pencil and paper’ type of activity) to understand how different topics would flow through the envision changes.
- Prior to implementing any change, develop and implement a series of stakeholder outreach events with these other groups to proactively communicate and manage the impact to their work.
In summary, these are some ideas that will get you started. The next time you find yourself needing to stand up a new work group, redefine the purpose of a governing body, or conduct a wholesale analysis of a business system in your organization – keep these suggestions in mind. You will be better positioned for success in what you implement.