Evolutionary Governance

Governance is always put in place for a reason. Something needs to be controlled, a check needs to be put in place, a risk needs to be managed. But governance is almost never removed, or changed when the reason for its existence changes. When something changes, old governance structures remain in place and new ones are built on top. I have worked in many organisations where they have introduced a new operating model or new ways of working, which come with various governance mechanisms built in, but rather than replace the existing governance they just add the new ones over the top.

One organisation I worked with had just adopted a scaled agile implementation which introduced sync meetings that were intended to replace existing steering committee meetings but instead they left the steering committee in place and just added another meeting that does essentially the same thing. Why? Because the senior execs were already comfortable with that meeting, and a whole industry had grown up in that organisation around producing very polished steerco packs. So rather than simplifying things, the new operating model just added extra complexity.

Another organisation introduced DevOps practices in some of their technical teams that enabled the teams to release weekly rather than quarterly, but made each weekly release jump through the same hoops as a huge quarterly release. Which resulted in having to hire 4 people just to fill in release paperwork.

Organisations build up entire cottage industries dedicated to managing, and often exploiting, existing governance. One organisation I worked with had a thriving industry based around the production of polished steerco packs. Each layer of the organisation would polish the pack a little more before passing it upwards. Each layer would make the message a little more palatable to the senior execs, glossing over issues and making the data look just a little bit better. The industry essentially existed to exploit governance mechanisms to keep the senior leaders in that organisation completely in the dark about what was actually going on. One senior exec described it to me as his “turd polishing factory”. By the time the turd had been polished through several layers of the organisation, all the useful information had been removed or glossed over. Any change to that structure to improve transparency was fiercely resisted by the people in the system because they feared a loss of control over information.

Whoever controls the flow of information in an organisation has a level of power over that organisation. Traditional governance promotes the hoarding of information within governance groups. Information disappears into these groups and re-appears, only reluctantly. Dribbled out in reports and summaries. Released only after the data is so old as to be useless. Or handed out in a way that increases that group’s political power in the organisation.

Governance is also used to enforce compliance. Governance sets the policies that must be followed. It standardises the organisation's approach. This is generally a good thing. We ensure compliance with policies to ensure that the outcome that policy is looking for is met - quality standards, privacy regulations, security practices, legal compliance. The organisation must meet those to deliver quality products and remain compliant with laws and regulations. We standardise our approach to ensure consistency and allow different parts of the organisation to communicate. Where traditional governance goes wrong is by being too rigid in its approach. By not allowing for innovation - you must follow the process as written. You can’t innovate and find better ways of delivering the same outcomes.

Compliance with the process becomes more important than the outcome. As industries build up around applying and enforcing governance, the focus shifts from the outcome that the governance was put in place to ensure, to enforcing the process. Compliance becomes more important than outcome.

Governance builds up layers of control, through policies, procedures, checklists and approvals, that set like concrete around the organisational machine and lock it into place. Often, when it comes to organisational change, re-designing the machine is the easy part. Redesigning the layers of governance around the machine, complete with people who have made their careers through administering that governance, is much harder.

Organisations must make the effort to chip away at the concrete. To remove unnecessary layers of governance and to replace old, rigid structures with lightweight, flexible governance based on outcomes, rather than rigid adherence to process. An organisation cannot evolve if it is locked in place by inflexible governance practices.

Next time we will look at the fourth of our Evolutionary perspectives - Evolutionary Culture.