What is governance?
Governance is the art of making important decisions and following their application.
As the most important decisions are the changes to the Enterprise Models, which have to do with Transformation, Governance therefore impacts far more on Transformation than the Operations.
Everyone is president
The characteristic of the digital culture is that information now circulates freely.
Everyone in the enterprise now has the means to formulate a judgment on the diagnosis and what needs to be done to move forward: everyone becomes "President".
The time spent convincing all these "presidents" can delay the decisions.
Moreover, the possibility of direct exchanges favors the setting up of pressure groups outside of existing bodies: see the "pigeon" movement in France that squeezed trade unions.
Enterprise governance is becoming more delicate. And yet, we have to decide and choose a way. Dividing governance up into 5 steps is the same, but the content of these steps has evolved:
1. listen: social networks, whether they are internal or external, are valuable for understanding the reactions and suggestions of customers, partners and employees. One group, Pernod Ricard, implemented an internal social network that is already used by half of its staff one year down the line, which breaks down the barriers between management and its base and has enabled them to collect some remarkable suggestions on how to improve the group.
2. build scenarios: we have to go faster than in the past and ensure that the Foundation is respected if we want to avoid a pile-up of disparate projects
3. decide: the decision must be accompanied by success indicators; we have to be able to objectively justify the degree of success of the initiative at its end to better communicate it
4. communicate the decision: everyone must understand the meaning of the decision; do not hesitate to use the internal social networks
5. support its decisions: transformation projects are difficult, especially in their initial stages; decision-makers must not only decide and provide the budget, they have to ensure that the project is successful and support the Transformation teams.
The biggest difficulty is being able to launch multiple Projects while respecting a certain coherence: the Foundation team has to manage the Common Good. But the Solution Project managers can view the Foundation team as a constraint that does not leave them the independence they need to successfully see their Project through. What should we do?
A competent and recognized Foundation director
The director of the Foundation Organizational unit must be credible and respected by the Project managers if we want his/her recommendations to be heeded.
The scope of the Foundation is in line with the strategy
We do not have the same needs for Synergy in Industry or in Services. The need for synergy is less strong at Total than at BNPParibas.
In the oil industry, jobs like exploration, refining, distribution and chemistry are extremely different and hardly justify having a common bank of Components. We can, on the other hand, pool commodity Solutions to manage human resources, finance or team collaboration.
In the bank, we only deal with Services and Information: the Product/Service Models are based on IT and Process Modeling. Expenditure on IT easily represents 10% of the turnover. The potential synergy is considerable between the Product lines, the set-ups in the different countries, and the front- and back-offices. The Foundation will play a crucial role here.
The scope and the means of the Foundation Organizational unit must be adapted to the ambition of the Group.
We need an important Foundation Organizational unit if the Group applies the "Centralize the Models and decentralize the Resources" principle.
Communicate about the Goal of the Foundation
We have to remind people about the Goal of the Foundation:
- Agility: because we reuse common Solutions or components
- Quality of the Solutions: because everything that is reused has already been tested
- Ability to exchange not only good ideas, but also good Solutions
- Coherence of management tools
- Uniqueness of information: we only enter it once, we are able to present all the information about the Customer
- A real ease to transfer employees as they find a uniform usage.
Project managers must respect the Foundation or prove that it is inadequate
We have to find Governance rules that lead the Business Lines to reuse what the Foundation Team can offer.
Every Project must respect the Foundation or demonstrate that it is not possible, but the project team cannot ignore the investment made by the group.
The control of the Project's conformity with the Foundation must happen before the decision-making body meets to validate the project and budget; it is the only way of avoiding comments from the Project manager like "to stay within the budget and timescale that you have given me, I cannot use the Foundation this time".
Do not penalize those who play the Foundation game by internal cross-charges
There is a big temptation to bill the Foundation to its Customers (the Business Solution builders) to turn it into a profit-making center and not a difficult-to-justify investment.
But, if we want to incite people to use it, we should do the opposite: the fist Customers of the Foundation, who will come up against the initial problems, should be paid to thank them for their solidarity.
It is only when the Foundation use has become generalized that we can consider billing for it.
The Foundation Organizational unit should behave like a supplier
The Foundation Organizational unit behaves like a Supplier to the Business Lines and not as a hierarchically superior structure. The Foundation Organizational unit is generally split in 2: those that build the Foundation and those that support it.
The Foundation Organizational unit improves its offer thanks to Business initiatives
Incite the Foundation Organizational unit to recover and package Components coming from the Business Lines.
The Business Units must behave as a source of proposals vis-a-vis the Foundation Team.
Follow indicators to gage the effectiveness of the Foundation
Follow the progression of indicators like agility, quality... anything that may reassure people about the concrete use of the Foundation.
Governance of purchasing
The Purchasing function is meaningful when the Product to buy has been clearly identified.
But, when it comes to judging the quality of an expert of a Model, merely discussing the price or purchase conditions is not enough. The Purchasing function consequently has perverse effects: to economize, we may go for a mediocre quality.
To avoid this trap, here are some suggestions:
- Emphasize the Quality, and not just the price
- Give preference to partnerships with small innovative structures
- Find new forms of partnership between hourly wage and fixed bid contracts
- Favor Cloud solutions (see the related theme)
The story of George the Baker is made available under the terms of the
Creative Commons Attribution - NoDerivatives 4.0 International license.