Rethinking Operational Governance

Why is it that costly organizational improvement programs often fail to produce improved decision making and implementation?

Why do they so frequently suffer from poor decisions, ones often made informally, or become bogged down in unnecessary processes and procedures, their best talent hidden away in silos, their operations plagued by constant firefighting? We examine how companies, if they are to find effective ways to address such problems, need to view their organization differently and rethink their approach to organizational change. This requires a fresh focus on operational governance, the approach to making and executing decisions.

The Congruence Model

Organizational effectiveness is achieved through the alignment and fit of the components

Executives might do well to ask whether their organizational model is consistent with their company’s current strategic issues and geographical challenges.

1How can I tell if the current operational governance model is the right fit with my company?

Provided you take a step back once in a while, the main symptoms of malfunctioning operational governance are not so difficult to identify. Two typical examples that will demonstrate the fit is far from perfect: Slow or late decision-making and even slower execution by teams, and overconsumption of management time in badly prepared and inconclusive meetings.
2Who in the organization is responsible for identifying and addressing potential operational governance issues?

Everyone in the organization will feel something is going wrong. Often it is developing over a long period of time, so it's difficult to identify before it becomes a real obstacle to performance. When it comes to addressing, our clear recommendation is that it is taken from the top, meaning the Executive Committee. Only this team will be in the position to enforce a profound change to accountabilities, information flow, delegations and committees’ set-up.
3Are certain industries more exposed or tolerant to operational governance disruption? How are leading organizations addressing this issue?

Operational governance is a major consideration for all industries. Leading organizations will have an annual review of operational governance – assessing performance in decision-making & execution, and deciding of adjustments – just like they will proceed for strategy or budget annual reviews.