Why You Might Need Some Governance

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I was recently on a call with a client (where we had worked on a major Transformation effort) to launch a Professional Services sourcing engagement with a spend well into the 100’s of millions.  While we were talking about the governance for this engagement, he (unsolicited) started talking about the Governance that we had helped put in place for their Transformation, and how without that, their entire Transformation would have failed.  Some of you may find that to be dramatic but he was absolutely, brilliantly right – without proper Governance, most initiatives will invariably fail.

Take a look at these question and mentally compile the responses in your head:

If your answers did not make you feel comfortable, then you know why Governance is important.  “Poor” decision making is the biggest source of friction in organizations and friction means loss of velocity.  By that logic, Governance then is the biggest accelerant that you can add to your initiatives and our research and experience totally supports that notion.

Governance ultimately boils down to one key goal: Increasing Decision Velocity, Adoption, and Decision Quality. All three of those are critical to any initiative or organization.  Here are some other factors to consider:

  • Alignment: Are we doing what’s best for the overall corporation…
  • Visibility: Are we aware of problems/discord in the organization…
  • Impact: Do we understand what could happen if we “look the other way”…
  • Communication: Are we communicating back to the field…
  • Prioritization: Is this where we should focus…
  • Responsibility: Who owns this…
  • Agreement: Do we know what needs to be done…
  • Friction: Are we doing what we can to reduce this…
  • Resolution: Was this problem solved and/or mitigated…

And some of the attributes of good Governance are:

  • Emphasis on Principles vs. Rules
  • RACI roles are defined
  • Governance is fully resourced (time, funding, people)
  • Stakeholders are involved early in the process
  • Enforcement is consistent
  • Stakeholder needs are balanced

We developed these through painful experiences of watching initiatives fail miserably, conducting detailed post mortems to understand why, and helping the initiatives recover.

It became obvious to us that Governance was the most critical and at the same time the most overlooked and underestimated component.  This is why it has become such an integral part of our work with every single client, regardless of the type of engagement.  Some clients get it right away while others we have to convince and cajole.  Eventually, ALL of them appreciate that we pushed them in the right direction.  Please take advantage of our learnings and start paying a lot more attention to Governance.

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Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.

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