Governance and oversight

Grant Leboff: Brian, one of the things that I thought was quite surprising in the book, is when you're looking at high-performance organizations, one of the things that you identify as importance, is governance.

Brian MacNeice: Mm-hmm (affirmative).

Grant Leboff: I think a lot of people always think of governance as sort of getting in the way of what we're supposed to do in the bureaucracy and the paperwork. But actually I think you show that at a level, it actually helps, it doesn't hinder.

Brian MacNeice: Yeah.

Grant Leboff: Perhaps you can explain how that works.

Brian MacNeice: Yeah. Governance isn't sexy. Nobody who talks about a high-performance organization never really addresses the subject of governance. But we've got a very simple principle that we call "just enough process." The ideal, and what you're looking for, and what we found in high-performing organizations, is that they build just enough process in order to make sure that they manage the business in the right way. In other words, just enough governance oversight so that it doesn't become burdensome and overly bureaucratic.

We have a concept of what we call "good governance" and "bad governance." There's probably three different types of governance. Strategic governance, which is about, "How do we make sure that we're on point, on strategy, and that we keep that narrative constantly going all the time, and so that we're managing in a responsible way as far as the business is concerned and the strategy of the organization is concerned?"

Regulatory governance is a given, you've just got to comply, right? Keep that to a minimum, but make sure that you deliver it.

The bad governance that we talk about, is what we call "Accommodating governance." Accommodating governance is stuff that we put in place to overcome some of our short-fallings. We've got accommodating governance to overcome, because we don't trust our people are going to do the right thing. So, "Why don't we make sure that our people understand what the right thing is, and then allow them to do it? Then we don't have to build some of the balances and checks into the system that we call accommodating governance, to overcome the fact that we've almost created this expectation that we don't expect our people to do what we are operating the way that we expect them to operate?"

What we try and advise our clients to do, is to focus on getting the right level of strategic governance, to cut out accommodating governance where you can, and minimize regulatory governance to what you need to do in order to comply. That frees up managerial time. That frees up people time within the organization, to get on with what you're there to do, which is to deliver it for your customers and shareholders.

Grant Leboff: It's very interesting when you talk about accommodating governance, because I can imagine how that slips into an organization without even realizing you have an issue. You say, "Well I'll tell you what, from now on, we're going to have this process where everybody has to tick this box or do this."

Brian MacNeice: Exactly.

Grant Leboff: It seems like the easiest solution in the world at the time, and suddenly, this starts to grow. Before you know it, you've got a whole level and a whole bureaucracy of accommodating governance. How does a company prevent that from happening the first place? I can even see how you get to cut it out, if someone comes along and says, "Right, we've got to get rid of this."

Brian McNeice: Yeah.

Grant Leboff: But how do you prevent it from creeping in, you know, almost by the back door?

Brian MacNeice: Yeah, so you've got to be fairly ruthless when it comes to some of your governance practices. Really challenge yourself. "Why have we got this process in place? Why have we got this meeting? What is the purpose of it?" If it's there to overcome some other underlying kind of issue that we're uncomfortable about, well, attack the underlying issue and don't build a process to overcome the fact that the underlying issue is there in the first instance, if you know what I mean. Really, really challenge yourself.

Every time that we get a group of people together, "Are we building a process that we've got to follow?" Really challenge yourself to understand, "Do we need this?", and, "Why do we need it?" "What's the most efficient way of putting this in place, so we build just enough process, rather than over-egg it?" If you find yourself continually in as many people tell me they are, continually in meetings where they're wondering, 'God Almighty, why have I got this meeting?', and 'What am I doing here?', and 'Surely, there's a better way.' Then, start asking those questions and ask them in a really hard way, and cut out some of that accommodating governance that actually, when you look at it, you don't really need.

Grant Leboff: Strategic governance is the good governance, should we say?

Brian MacNeice: Yeah.

Grant Leboff: Just enough, I understand.

Brian MacNeice: Yeah.

Grant Leboff: Can you give us an example, just so people understand what we're talking about when we talk about strategic governance?

Brian MacNeice: Yeah, so we've got some practices that we put in place with clients where on an equality basis, they have a kind of strategic review of where they're going. They take a day out. They look at, "Okay in the next quarter, what are our immediate priorities and how do we make sure all our people are aligned behind our immediate priorities from an operational point of view and also from a kind of long term capability point of view, kind of development point of view?"

In other clients for example, in an operational environment, we have daily meetings that happen at the start of a shift. Where they have a five minute stand up meeting in front of a performance board, where they review performance of their previous shift, and they set the agenda for this current shift. What that does is, it's a really efficient way of getting people aligned and clear about what the immediate priorities are, and cuts out the need to have some of the stuff that was in place previously, that was taking care of some of those issues.

In that example with the five minute kind of start of shift meeting, they had a whole bunch of reports that get produced at the end and start of shifts that get kind of delivered out to people. Somebody has to write those in the first instance. They get out to people. Some of them read them, some of them don't. Now all that's gone. It's replaced with a very simple process that takes five minutes, but absolutely ensures that everybody is aligned at the start of that shift. It's a much, much more efficient way of managing the whole process. There are examples of some of the things that we're looking at, in terms of good governance versus bad accommodating governance.

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