Organization Governance

 

 

An Organization's Governance System

What is Governance?

An organization’s governance system is the total collection of processes, procedures, and policies that are followed when developing and deploying the organization’s strategic plan. In short, governance is how the organization develops its strategy and then how it executes that strategy.

 

Within most organization’s governance system the process from start to finish is:

1) Setting the strategy

2) Filtering it against customer requirements

3) Communicating the strategic plan to members of the organization

4) Collecting feedback

5) Translating the strategic plan into clear tactics by appropriately allocating resources

6) Executing the plan

7) Monitoring progress and

8) Adjusting the plan based on results and lessons learned

how to structure a GovernancE System

While governance is a collection of processes that guide the translation of strategy into action, it also is a way to clarify decision-making authority and ownership for executing the organization’s strategic plan. Most organizations call the teams or groups that participate in the various governance processes “steering teams” or “councils”.

 

 

An example of how an organization might structure its governance is shown to the left. An organization might first create an executive steering team, which consists of senior executives who ultimately are accountable for the achievement of the strategic plan.

At the next level of governance, there usually is a quality (or improvement) council which helps to facilitate the translation of strategy into clear action plans. A critical activity that occurs at this level is project selection – helping to ensure that the organization prioritizes the necessary projects (or change initiatives) for realizing its strategic objectives.

 

With these projects in mind, action plans are developed, assigned ownership, and executed by the next level of governance which includes the organization’s deployment (or improvement) teams, usually comprised of a project sponsor, process owner, project manager, improvement expert, and subject-matter experts.

Facilitating Effective Governance

The above-mentioned committees and teams must work collaboratively to drive action and serve the organization as an information highway for what the organization’s strategy is and what progress has been achieved. As members of governance seek to set the organization’s strategy up for success, it is likely that they will need to participate in many activities such as removing barriers, providing teams adequate support, and collecting lessons learned. These activities are essential in providing the organization with a clear path for implementing its strategic plan.

 

In the table below, we have provided a list of the various activities that a governance system will need to perform to support the organization as it executes its strategic plan.

Governance-Pillar-2-Create-Processes

Create Policies and Processes

Policies provide an overarching framework for how the strategy will be developed and deployed. Based on this framework, an effective governance system will then create processes that enable the work to occur. Some common processes that a governance system may help develop include the creation of a project funnel, the design of the project selection rubric, and the facilitation of regular project tollgate reviews.

 

Governance-Pillar-3-Provide-Support

Select Projects and Provide Support

Because the quality (improvement) council has visibility across the organization, it is in the best position to evaluate each project’s business case, select and prioritize projects, assign resources, remove barriers, and reallocate resources as needed.

Governance-Pillar-4-Measure-Progress

Measure and Review Progress

The quality (improvement) council must routinely review the health and status of the organization’s strategy and the projects that must be successful in order to drive the strategy forward. As such, the council should be receiving regular status updates on each project’s progress. Through these updates, the council can determine if the project is on track to be successful and make adjustments as necessary. It is through these regular reviews that an effective governance system creates a cadence of accountability.

Governance-Pillar-5-Provide-Reward-and-Recognition

Provide Reward and Recognition

A good governance system doesn’t just monitor the health and status of projects, it also provides project teams with appropriate feedback, reward and recognition, and opportunities for development and growth.

Governance-Pillar-6-Establish-Infrastructure

Establish Infrastructure

Although the creation of infrastructure can be costly, without it, most projects will struggle to meet their desired outcomes. As such, a governance system must aim to either transfer the necessary improvement skills to project team members, or create a formal improvement team that consists of process improvement professionals and project managers. Other important aspects of infrastructure include technology such as data analytic tools or project management software and investment in curriculum design, as well as regular training opportunities to instill the use of disciplined improvement methods across the organization.

Governance-Pillar-7-Coordinate-and-Communicate

Coordinate and Communicate

Information sharing is an essential activity for a governance system. Not only does information sharing help to coordinate the execution of projects across various business units/departments or even different geographic locations, but it ensures that each project team has the information they need to do their job.

Governance-Pillar-8-Drive-Accountability

Drive Accountability

When review sessions of project action plans occur with regularity (ideally occurring on the same day and same time each week) project teams begin to establish shared accountability for the project’s success. When ownership is vague, the council can step in to clarify ownership (using a tools such as a RACI or responsibility matrix).

Governance-Pillar-9-Collect-Lessons-Learned

Collect and Act on Lessons Learned

Lessons learned is the knowledge that an organization gains from conducting projects. The experiences are collected directly from project team members and can be positive or negative. The point of collecting lessons learned isn’t to critique the project through a look-back review, but to glean important information that will help make projects more successful in the future.

Coming Next...

As we covered in this blog post, a governance system is how an organization develops its strategy and executes that strategy. In upcoming posts we will discuss how a governance system can execute strategy effectively by assessing organizational maturity and change readiness, and the importance of a governance system’s role in resource planning. Stay tuned!

Learn More About Governance and Sponsoring Projects

Suggesting and approving project requests is a critical step in ensuring an organization is working on the right change efforts. This topic is a core concept of leading and sponsoring change. To learn more about sponsoring projects, please visit our Introduction to Project Sponsorship Certification Course.

Introduction to Project Sponsor Training, continuous improvement certifications

The project sponsor plays a critical role in the success of an organization’s change initiatives. To get the total value out of its change initiatives, the organization must invest in leadership the skills they will need to help govern project activities. Effective project sponsorship helps ensure that the organization is working on the right projects and that the project teams have adequate support.

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