Optimize Governance with Powerful Organizational Design

Efficient and effective governance plays a pivotal role in improving organizational performance. In this post, I define governance as the processes of interaction and decision-making among participants involved in collective problem-solving or function. Simply put, governance involves various meetings with middle or senior-level management to discuss and decide on plans regarding personnel and fund allocation for projects or programs.

Governance serves as a foundation for successful organizational change. It is crucial to analyze the needs of stakeholders and design governance structures that align with best practices. By implementing the approaches discussed in this blog, you will be better equipped to:

  • Understand and address the unique requirements and motivations of different stakeholder groups
  • Communicate a decision-making model that is clear to everyone
  • Achieve an optimal balance of collaboration, responsibility, and authority among the teams or units involved in the project.

Be clear, be consistent, and be specific.

To ensure productive and effective meetings, it is crucial to establish clear objectives, consistent practices, and specific decision-making processes from the start. The highest level of frustration arises when participants lose sight of the meeting’s purpose and encounter discrepancies in information sharing, recommendations, and decision authority across sessions. This common pitfall can be overcome by creating a robust governance model that encompasses all relevant working groups involved in the project. Each group must have a well-defined purpose and a charter that aligns with the overall project objectives.

Designing an effective charter is only the first step; successful execution relies on the active involvement and facilitation of the various groups. To increase the likelihood of this, consider employing the following techniques:

  • Prior to implementing a new or revised governance model, conduct scenario simulations involving representatives from each group. This exercise aims to validate the intended purpose of the model and assess its impact on different areas when components are modified.
  • Establish reporting and measurement strategies to gauge the health of the governance model. It is particularly beneficial to place these measurement points at key interfaces between groups to monitor handoffs and consistency of information flow. Potential measurement techniques include monitoring the timeliness of decisions in relation to planned dates or durations, assessing adherence to established decision-making standards, and tracking the overall time taken for work or decisions to progress through the governance process and each stage involved.
  • Allocate dedicated facilitators for each group and ensure their continuous presence. These facilitators play a critical role in coordinating and optimizing workflow and consistency across the various groups.

By diligently implementing these strategies, a highly efficient and well-functioning governance model can be established, which paves the way for effective decision-making and project success.

Govern the work, not the org chart.

To ensure effective governance, focus on governing the work itself rather than relying solely on the organizational chart. It is crucial to comprehend the intricacies of the work’s scope in order to develop and implement a successful governance strategy. This should be given the highest priority, challenging the assumption that the work is solely tied to the hierarchical structure of the organization.

Change transcends both vertical and horizontal dimensions within an organizational chart. Adopting a systems-based approach allows for a comprehensive understanding of the inputs, outputs, and stakeholders associated with a process. Although an organizational chart may indicate authority and some level of involvement, it is inadequate for gaining insights into how formal and informal decisions are made, as well as how work and information flow through different processes.

Conducting a stakeholder analysis reveals potential imbalances in engagement across the organizational chart. This understanding helps to make sense of barriers hindering effective governance, such as limited participation, knowledge-sharing, or buy-in. Refining this analysis requires a careful examination of underlying processes, as well as considering cultural, interpersonal, and behavioral aspects of the individuals involved.

You are not alone, and you are not operating on an island.

Successful governance demands a synchronized decision-making network where all elements align and operate effectively. The ripple effect of any change within this network must be acknowledged and analyzed for a comprehensive transformation.

Picture a production line: governance processes akin to production lines generating effective decisions. Isolated alterations to stages such as idea generation, definition, maturation, approval, execution, and monitoring/oversight are insufficient. Each stage significantly influences the others, often in intricate and non-linear ways. To design for change, consider the following approaches:

  • Capture, define, and validate the interdependencies of a single team or group within the broader process and decision-making environment.
  • ‘Stress-test’ proposed changes to assess the impacts on other groups and teams. Use role-play or alternative outcome scenarios to understand how different topics flow through envisioned changes.
  • Proactively communicate and manage the impact of changes through stakeholder outreach events with other groups.

Keep these ideas in mind when establishing a new work group, redefining the purpose of a governing body, or conducting a comprehensive analysis of a business system in your organization. Embrace these suggestions to position yourself for success.