Toward Collaboration: Dispelling the Common Myths of Governance

by William M. Ulrich, Senior Consultant, Cutter Consortium

Entrenched political infrastructures will not fall in line easily around the idea of tackling the governance issue. To the contrary, business units and IT spend most of their time working around the concept of governance because no one believes that it can change. This fact is clearly visible in most organizations.

Consider an insurance company built through acquisitions, with three claims units responsible for an overlapping customer base. The senior VPs overseeing each claims area will not even discuss the idea of aligning support structures, adjudication functions, payment structures, or related capabilities. Yet these executives, with other senior managers, complain the loudest because IT does not have a consolidated business intelligence environment and because they cannot support changes in regulatory or other business requirements in a timely manner.

The underlying issue is not inefficient processes, a broken data architecture, or old systems -- these are only symptoms. Rather, it is the fact that these business units do not work toward common solutions through a collaborative governance structure. Getting management to recognize that governance requires serious attention, and that the solution involves creating a collaborative governance structure, will take some creative internal marketing.

When attempting to sell collaborative governance, it is important to dispel the myths surrounding governance. These myths underlie much of the political resistance collaborative governance advocates face. Governance proponents must be prepared to meet challenges from multiple corners, and they will find that selling enterprise governance requires addressing the following concerns:

• Myth #1. The organization ("org") chart depicts how the enterprise functions. The org chart tells us little about an enterprise. Org charts cannot tell us who interacts with whom inside or outside the enterprise; do not expose operational redundancies or inefficiencies; cannot facilitate approaches to optimizing business capabilities, processes, and semantics; and offer little insight into how a business can self-organize into solution-oriented teams. To address these weaknesses, collaborative governance exposes and facilitates optimization of the empty space in the org chart.

• Myth #2. Any focus on governance implies additional layers of bureaucracy. Think of the traditional corporate hierarchy, where decisions can take weeks or months. When decisions are made, they typically are made too late, involve too many or too few people, or achieve undesired or unanticipated results. Collaborative governance circumvents the bureaucratic layers found in traditional command-and-control structures by putting deliberation and decision-making power in the hands of those who understand the issues and solutions.

• Myth #3. Top-down reorganizations deliver effective governance. Several "show of hands" surveys of business professionals have indicated that more than one-third of the organizations surveyed had reorganized in the past year. Executives drive a continual cycle of reorganizations that take months to envision and deploy. When the new org chart is rolled out, it is met with indifference by the masses. Executives expect top-down reshuffling to result in bottom-line benefits, but organizations are organic ecosystems that morph continuously -- in spite of and beyond the view of top-down planners. Collaborative governance allows the enterprise ecosystem to self-organize, self-align, and adapt as needed to compete and to thrive.

• Myth #4. Most business professionals are limited in their ability to affect governance. Many professionals ignore or sidestep governance because they think they have little control over how things are governed. To the contrary, it is the rank-and-file workers that have the most influence on governance. This occurs when business professionals self-organize and take action in new and unique ways to deliver bottom-line value. Collaborative governance happens in the trenches, among people who interact everyday. The real governance solutions happen outside the executive suite, as we will see in the telecommunications case study discussed in the next section.

Historically, organizations have faced two governance options: (1) ignore governance and continue to apply an endless cycle of Band-Aid solutions to problems that are the result of ineffective governance, or (2) allow executives to force-feed top-down solutions onto organizational structures they barely understand and over which they have little impact. Either approach will undercut or even cripple the most well-intended business and IT initiatives.

I welcome your comments on this issue of the Cutter Edge and encourage you to send your insights on the market in general to me at wulrich@cutter.com.

-- William Ulrich, Senior Consultant, Cutter Consortium