Why Good Governance is Essential to Digital Transformation
Most of us are familiar with the term governance, especially if you operate within a highly regulated industry. There’s board governance, data governance, and technical governance – but what does the word governance mean regarding Digital Transformation? I know it can sound like a dry and dull topic, but if you shift your mindset around it, you’ll see that it’s all about communication and collaboration, essential to a successful and lasting Transformation.
Today’s article sheds light on the concept of governance in Digital Transformations and Operating Model Transformations, why it’s so important to get it right, and the small shifts you can start making today to improve your processes and see better results.
What is Governance in Digital Transformation?
We hear the word “governance” applied in many different contexts, so I want to be clear when I say that governance in Digital Transformation is not about reporting on security information related to data or regulatory information (though that’s important, it’s not the context here).
Here, we’re talking about how work gets done in an organization, how it’s accounted for and managed across business units, and how communication around the work is handled. Simply put, it’s how the right hand knows what the left hand is doing.
And when we’re talking about a product operating model, these things become increasingly important because the core principles of these ways of working drive empowered ownership and decision-making down into the organization. But that doesn’t mean that leaders across the organization don’t need line of sight to that work and those decisions. Equally important, the teams at every level of the organization must know what’s happening at the top to know how to prioritize and align their decisions about what to work on and when. Good governance, therefore, must include:
A clear articulation of company strategy and desired outcomes
A map for where the organization is going and what it hopes to achieve
Alignment around what “good” looks like and the expectations of every team and function in getting there
Alignment with business leaders and a shared understanding of outcomes, responsibilities, and ownership
An outline that shows who’s accountable for different parts of strategy and execution, both at the leadership level, product team level, and even the individual contributor level (another way of thinking about this is as cascading goals, but it’s oriented around elements in the value chain)
It might seem simple, but articulating strategy in terms of outcomes rather than outputs is critical but is often very different from how most organizations typically do this.
Why a Good Governance Process is Important to Transformation
Many companies struggle to implement these critical elements, fail to establish cadences for planning, and find the right validation and tracking processes to gauge progress against outcomes and strategies.
Typically, they haven’t been able to balance processes that are too structured (hello, stagegates, and project planning) and not structured enough. But good governance doesn’t happen without intention.
When Tuckpoint goes into an organization, these are the components we typically help leaders and teams address to ensure good governance is nurtured and developed from the start of our work together.
Setting strategy and expectations early so there’s a clear North Star for teams to align with, and making sure a process is in place to communicate this information early and often, not just through the transformation but as a steady drumbeat to remind the organization what to focus on and why.
Reimagining processes that support excellent cross-team collaboration and communication surrounding the work (accomplishments, progress, failures, and learnings), ensuring transparency around wins and stumbles at every level of the organization and that both are celebrated for what’s learned.
Rethinking annual or quarterly planning cycles so that supporting teams have more runway to conduct customer research, ideate, and generally have the time required for their thoughtful planning before having their plans due for higher order “rollup” plans or budget requests.
When things like these are in place, they lead to greater transparency and, as a result, the trust across and up/down the organization that’s essential for developing an outcome-oriented, product-led organization.
Some General Governance Guidelines and Practices to Consider
Once again, there’s no formula or one-size-fits-all approach to this. Success depends on communication within and across teams and from the top of the org to the bottom (and back up again). It’s all about talking with your people and making collaboration and co-creation easier.
However, I can offer a few tips that work within most organizations. Here are a few of my favorites.
Shift your mindset around planning cycles. Planning is a two-way street so you’ll need new planning cadences to allow information to flow both ways (down from leadership to teams, back up again). That means giving teams ample time to digest the strategies shared by leadership and time to complete the cross-team collaboration required to create their own strategies for getting the work done. This happens before you demand a roadmap, so it may require the executive team to get their act together sooner. This planning cycle could happen quarterly, bi-annually, or annually. The point is to leave time to collaborate that’s proportional to the size of the plan.
Resist the urge to force a formal timeline. Naturally, you’ll need some essential mile markers in the sand, but don’t let things get so bogged down by dates that the team doesn’t have residual time to manage their day-to-day responsibilities. Planning can’t be full-time when product teams have existing Sprints to run and backlogs to manage. This is what a roadmap mindset is all about (more on that here).
Get clear on the role of governance meetings: QBRs and MBRs don’t often indicate whether they’re forward- or backward-looking. It’s not productive when half the room thinks they’re discussing past performance while the other half is discussing tomorrow's problem. And, unless your meeting is 4 hours long, you can’t cover the past and future while doing both justice in a single meeting. To avoid this, I usually recommend clients break up the discussion into a predictable cadence. For example, on a quarterly cadence, the first month is backward looking to examine the performance of last quarter’s priorities, the second month is to dig deeper into a particular set of insights or learnings, and the third month is for planning the next quarter’s priorities. Splitting up these conversations allows teams to stay much more focused and make more informed decisions.
In Conclusion
Governance in Digital Transformation is all about how work gets done, the processes surrounding it, how it’s accounted for and managed, and how communication around the work is handled. When these items are in place, they foster trust, which is essential for developing an outcome-oriented, product-led organization. All of these magical pieces are part of the secret sauce of a transformation with staying power.
Feeling stuck when it comes to governance and operations? I don’t blame you – it’s complicated and rooted in Operating Model Transformation (which is our specialty here at Tuckpoint). Don’t hesitate to send me a note or schedule a time to pick my brain about whatever challenge you’re dealing with right now. Chances are, our team has seen it before and knows a path forward.
Want more related reading? Check out these resources: