Effective governance focuses on optimized alignment of structures and accountabilities
Nothing is less productive than to make more efficient what should not be done at all.” ~ Peter Drucker
Goal alignment is critical to the achievement of your strategies and to ensuring flexibility to rapidly respond to evolutions in goals and associated strategies.
Good governance focuses on optimized alignment of its structures to your overall strategies. We view these structures collectively as "governance chains”. Good governance means that you ensure that all resources increasingly contribute to achieving your mission and vision. Our analytics enables you to objectively align your governance chains for success.
GAPTM provides analytics and methodologies provide you with the tools to rapidly model, assess and optimizes your organization.
Goal alignment is achieved through governance chains. Each chain begins with a board strategy. The “chain” is made up of all the goals that contribute to the strategy. They are linked together by your various organizational levels. Historically, several methodologies used governance chains. These methodologies have faced two overwhelming challenges:
- Complexity: Organizations have evolved to encompass a complex workforce. This adds much complexity as goals contribute both to those of the next higher level and to other parts of the organization.
- Magnitude: Each unit typically has at least 5 or 6 goals. The number of chains escalates quickly. For example, an enterprise with 12 V.P.’s, each with 12 Directors, and in turn, each with 12 Managers with 6 goals apiece – would have more than 3 million governance chains!
These factors constrained the use of governance chain methodologies. We developed a tool to rapidly model, assess and optimize enterprises of all sizes. We call our technologies and methodologies the “Goal Alignment Program" (GAPTM ).
Posts — Governance Alignment
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FAQ — Governance Alignment
Good governance means that board makes sure that all resources increasingly contribute to achieving the organization’s mission and vision. Our governance alignment program provides analytics and methodologies give boards and management with the tools to rapidly model, assess and optimizes your organization. This requires generative thinking and governing.
Accountability is a fundamental requirement of good governance. The organization has an obligation to report, explain and be answerable for the consequences of decisions it has made on behalf of the people serves — shareholders, customers workforce and other stakeholders.
Good governance uses generative thinking
We view these structures collectively as “governance chains”. Good governance means that you make sure that all resources increasingly contribute to achieving your mission and vision. Our analytics enables you to objectively align your governance chains for success.
Good governance is transparent
People should be able to follow and understand the decision-making process. This means that they will be able to clearly see how and why a decision was made – what information, advice and consultation were considered, and which legislative requirements (when relevant) were followed.
Good governance follows the rule of law
This means that decisions are consistent with relevant legislation or common law and are within the powers of the board.
Good governance is responsive
The organization should always try to serve the needs of shareholders, customers workforce and other stakeholders while balancing competing interests in a timely, proper and responsive way.
Good governance is fair and inclusive
Feelings of well-being results from shareholders, customers workforce and other stakeholders are considered by the board in the decision-making process. This means that all groups, particularly the most vulnerable, should have opportunities to take part in the process.
Good governance is effective and efficient
The organization implements decisions and follow processes that make the best use of the available people, resources and time to make sure the best possible results.
Good governance is participatory
Provide an opportunity for anyone affected by or interested in a decision to take part in the process for making that decision. This can happen in several ways:
- provide interested parties with information
- ask for their opinion
- offer the opportunity to make recommendations
- make them part of the decision-making process
Aligning organizational structure with its strategy is essential for an organization to deliver its plans and achieve success.
Here is how we define:
- Strategy is how your organization goes about its work is its strategy (vs. your strategic plan document). This includes the plans that set out how your organization will use its major resources to meet specific goals.
- Structure is the way the pieces of your organization fit together to meet a common goal. The structure is much more than an organization chart. It is the people, positions, procedures, processes, culture, technology and related elements. It defines how all the pieces, parts and processes work together.
- Alignment means that every human, organizational, technical and financial resource increasingly supports and contributes to the achieving strategy in a fashion that is: demonstrable, measurable, efficient and effective, and comply with your principles, policy directives and constraints.
- Workforce is the resources to deliver your plans. It includes staff, partners, outsourced work, and consultants.
Do not view structure separate from strategy
Your organization’s structure is a powerful force. It can support your efforts or work against them. You cannot direct your organization to do something for any length of time unless the structure is capable of supporting your strategy. Task overlap creates confusion, inefficiencies and lack of accountability because it is not clear who does what by when. A strong foundation for long-term productivity requires you to structure your entire workforce to avoid task overlap and confusion.
With our Governance Alignment Program, you optimize your structure. It provides a platform to adjust the structure every time you adjust your priorities.
Aligning structure with your strategy improves efficiency, promotes teamwork, creates work together, and reduces cost. Structure and strategy are dependent on each other. You can create the most efficient and team oriented structure possible and still end up in the same place you are or worse if a good strategy is not adopted. Great your strategy right first.
With a clear focus on what you want to do, align your structure in such a way to best do this. Be thoughtful. Divide responsibilities for optimal results, create branches and decide whether each effort or group participation is the best method for it to meet your goals. The structure needs to support strategy. The strategy is fluid. When you change your strategy, you must make sure your structure supports the new strategy. Otherwise, the existing structure pulls your organization back to its old strategy.
When you make major changes, you must carefully think out every aspect of the structure required to support the strategy. Every part of your organization, every person working for it needs to focus on supporting the vision and direction. Integrated all the effort and resources support the strategy.
It takes the right structure for a strategy to succeed
Management that is solely focused on results can have a tendency to direct everyone on what they need to do without paying attention to the current way your organization works. While members of the workforce may carry out these actions individually, it is only when their daily work supports strategy that your organization’s direction is sustainable over time.
To carry out such a strategic shift requires a change in your organization itself. A well-thought-out structural change is based on a detailed cause and effect analysis. You do not just change a structure to change it. Make sure the changes support your strategy and your workforce understands the reasons for the change. At the same time, do not just start a better leadership and engagement approach in your company or alter the organizational chart without evaluating how that will affect your ability to carry out your current strategies.
We cover this in detail in our "achieving strategy approach." Our "goal alignment program" provides robust tools and methodologies to create the structure that best supports meeting your strategic goals.
Regulatory Excellence Attributes
What makes a regulator excellent is answered in several distinct ways, each of which gives rise to distinct types of attributes. What makes a regulator excellent? Applying the attributes of regulatory attributes and having a process of assessing the regulator’s outcomes versus the attributes.
Characteristics of a regulator (as an organization)
When defining excellence in terms of characteristics, adjectives will be used to describe the qualities or capacities of the regulator as an organization: e.g., “knowledgeable,” “well-funded,” “adequately staffed,” “credible,” “honest,” “legitimate,” and so forth.
These characteristics do not describe specific actions or outcomes, although they may well be affected by (or in turn affect) actions and outcomes. Rather, they describe a general “state” of the regulator, a standing set of resources upon which it has to draw or a general posture that it holds in conducting its day-to-day operations and affecting outcomes in the world.
Actions (or best practices) of regulating
Another way to define excellence lies in the type of actions the regulator takes in the course of regulating. Attributes as actions might be articulated in general terms, describing the regulator’s actions in the course of regulating. Perhaps using adjectives such as “vigilant,” “serious,” “reasonable,” “transparent,” and so forth.
Or excellence as action might be articulated in terms of specific types of best practices.
- “An excellent regulator takes enforcement actions against the biggest risks.”
- “An excellent regulator uses flexible regulatory instruments.”
- “An excellent regulator adopts a problem-solving rather than a punitive approach to enforcement.”
Outcomes (or indicia of regulatory performance)
Ultimately the characteristics that define an excellent regulator lead to desired outcomes. The actions that it takes also have to align with the desirable outcomes. These outcomes, then, might be what gets used to define regulatory excellence.
Many outcomes, when used as attributes of regulatory excellence, will describe substantive states of the world. For example:
- effectiveness (impact in terms of solving the problem or achieve an ultimate outcome of concern)
- cost-effectiveness (achieving a specific level of the desired outcome at a low cost)
- efficiency (balancing the desired outcome – i.e., problem reduction – with other outcomes or concerns, such as costs, so as to achieve an “optimal” level of problem reduction)
- equity (a fair distribution of the costs and benefits of regulatory action)
All of these examples focus on substantive outcomes. But other outcomes that define regulatory excellence need to be thought of in process- oriented terms. For example, the key attributes of an excellent regulator’s stakeholder engagement process might be defined in terms of legitimacy or trust by the public. If a regulatory process leaves members of the public feeling they were listened to and respected, that is a kind of process outcome that might define regulatory excellence.
Indicia of performance
Whether substantive or process-based outcomes – will presumably have some connection with a regulator’s characteristics and actions. Sometimes this connection will be instrumental, in that a regulator possessing certain characteristics, or a regulator that takes certain kinds of actions, will be more likely to achieve excellent outcomes. For example, a regulator that is highly knowledgeable (a characteristic) will be more likely to achieve effective outcomes. Or as another example, a regulator that adopts flexible rules (action) will be more likely to achieve cost-effective or efficient outcomes. And of course, outcomes may well feedback to shape a regulator’s characteristics or actions too.
Our approach combines five processes, 25 years of achieving strategy as a CEO and the advance teaching of the Rotman School of Business. into our Achieving Strategy method. The methodologies are:
- Theory of Constraints – Eli Goldratt
- Strategic Doing – Purdue University
- Goal Alignment Program – J.A. Harcourt and Kim Allen
- Stats with Why – Simon Sinek
- Lean start-up
In his Harvard Business Review article Five Questions to Build a Strategy former Rotman Dean Roger Martin outlines his preferred approach. He treats strategy — making as developing a set of answers to five interlinked questions. The questions — which cascade logically from the first to the last — are as follows:
- What are our broad aspirations for our organization & the concrete goals against which we can measure our progress?
- Across the potential field available to us, where will we choose to play and not play?
- In our chosen place to play, how will we choose to win against the competitors there?
- What capabilities are necessary to build and maintain to win in our chosen manner?
- What management systems are necessary to operate to build and maintain the key capabilities?
The Theory of Constraints (TOC) is a management model that views any manageable system as being limited in achieving more of its goals by a very small number of constraints. There is always at least one constraint. TOC uses a focusing process to find the constraint and restructure the rest of the organization around it. TOC adopts the common idiom “a chain is no stronger than its weakest link.” This means that processes, organizations, etc., are vulnerable because the weakest person or part can always damage or break them or at least adversely affect the outcome. TOC views that all organizations exist to create shareholder value. There are two necessary conditions satisfied customers and satisfied staff. In our approach we expand the view to encompass the entire workforce. Organizations rely on the entire workforce to deliver value to customers.
Strategic Doing teaches people how to form collaborations quickly, move them toward measurable outcomes and make adjustments along the way. In today’s world, collaboration is essential to meet the complex challenges we face. Strategic Doing enables leaders to design and guide new networks that generate creative solutions. It is a new strategy discipline that is lean, agile and fast—just what organizations, communities and regions need to survive and thrive.
The diagram below combines TOC and Strategic Doing for a dynamic process of strategic execution.
For not-for-profit organizations defining shareholder value is often more challenge. In Associations, members may be the shareholders, workforce and customers all at the same time. Thus knowing who the shareholders, workforce and customers is essential to effectively achieving strategy.
The Goal Alignment Program is a rigorous, sustainable governance model where regulatory policy development is integral to the way organization does work. This model ensured that every human, organizational, technical, and financial resource supports and contributes to achieving the objects of the purpose of the organization in a way that is demonstrable, transparent, measurable, efficient, effective, and comply with its principles, policy directives, and constraints.
Starts with Why – Simon Sinek → The idea that great leaders inspire others by putting:
- the Why (the purpose) before
- the How (the process) or
- the What (the product)
These revolutionary philosophies on leadership can easily be used in any professional and personal situation that calls for inspiration and influence.
Lean Startup provides a scientific approach to creating and managing startups and get a desired product to customers’ hands faster. This method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with greatest acceleration. It is a principled approach to new product development.
We off the following TOC applications:
Winning Collaboration builds four day-to-day management skills to get people working together in organizations facing change. Every manager and employee must be able to resolve conflicts, within and between departments and functional areas, in a win-win way that meets organizational goals. Another essential skill is in better understanding and preventing adverse effects that can occur from change—from implementing ideas that are not well enough thought through. A third skill is in being able to formulate project plans for change that incorporate significant concerns of team members and stakeholders. Finally, managers must increase their effectiveness with buy-in, meetings, and procedures. These are the skills that Winning Collaboration builds.
Compelling offers to the market do not sell themselves. To be effective, salespeople must overcome a root problem of many sales failures. This root problem is described in Neil Rackham’s book entitled SPIN Selling—the tendency to jump too quickly into solutions before the customer agrees with you about their issue. The TOC approach to sales rigorously works at overcoming the layers of resistance to change, through a formal process. Learning how to involve the customer and take a step-by-step approach, Salespeople go through extensive role plays to perfect the TOC sales skills.
This process creates a comprehensive strategy designed to meet the company’s goals. The techniques first build the commitment of all key members of the senior management team. Using Goldratt’s general analysis of each part of an organization and supply chain, the facilitator carefully translates this material to the participant organization. The first four days build, through a powerful combination of participant interaction and Goldratt lectures, a shared understanding of the cause-effect relationships across an organization. In the second 4 days, each executive defines their major problem blocking them from meeting the Viable Vision. The issues are analyzed using Theory of Constraints Thinking Process tools, and the collection of ideas that comprise the strategy is developed. The session concludes with a plan that designates the milestones necessary to accomplish the goals, the sequence, the responsibilities and estimated duration. Documentation of the entire effort, including a Critical Chain project plan, is provided.
The TOC Thinking Process, in combination with the Five Focusing Steps, give an individual the ability to take any organization and improve it, making a significant contribution to that organization’s goals. An expert in these processes, or ‘Jonah,’ has the skill to analyze any situation and get others to buy-in to their logic. To learn and understand these processes, an individual must apply them with success to their organization or client. Furthermore, to avoid re-inventing the wheel, these methods should be used in conjunction with the applications of TOC already invented in the areas described above and below (i.e., production and distribution logistics, etc.). In a Viable Vision effort, these processes are used to deal with issues that do not have generic solutions. In most implementations, it is normal for such problems to arise.
As Goldratt explains, Marketing is bringing the ducks to desire the corn in your field. In fact, if marketing is doing their job, the ducks should be sitting in your area with glue on their feet. Sales’ job is to shoot the sitting ducks. To create such a compelling offer to the market, Marketing people must analyze the undesirable effects that customers experience, NOT WITH YOUR COMPANY, but rather with the entire industry. The proposal is based upon overcoming industry-wide adverse effects. Such a scheme is never based on price reductions or inherent product modifications. The solution is intended to give a minimum two-year competitive advantage. It documents the components to enable salespeople to effectively overcome the layers of resistance to change in selling the solution to the market.
One of the keys to embedding new, positive behavior into an organization lies with financial reporting and measurements. A good measurement system must give every individual the tools to make correct, real-time decisions. Also, individuals must have simple, clear reports and information that show them the impact of their decisions on the goals of the company. TOC’s Throughput Accounting approach to achieving proper metrics and reporting does not replace existing accounting systems.
- Traditional systems are still used for external reporting.
- Throughput Accounting is used to help managers make better holistic decisions.
The primary metrics include the impact of any decision on Throughput, Investment, and Operating Expenses. Supply Chain metrics include Throughput Value Days and Inventory Value Days.
Many companies made an enormous investment in technology over the past few years. How many CEOs have you heard bragging about their fantastic ERP and I.T. implementations and the incredible return on investment they provided? Annoyed CEOs are looking for the “sweet spot” of technology, and so are I.T. executives. However, I.T. and functional executives are often in conflict as they struggle to find common ground. Technology vendors are part of this battleground. TOC believes in the application of technology to help address the organization’s constraint. It asks a series of questions that help ensure that Technology is used in the right places and with significant changes in organization rules. This approach—changing rules to take advantage of changes in technology– helps to ensure the sufficiency of technology to yield outstanding, tangible results.
After 40 years of Critical Path experience, projects are still frequently late, over budget and not within specifications. Critical Chain reveals new assumptions about human behavior and overloaded project environments and offers a breakthrough solution. Clients who have implemented Critical Chain claim that their project durations drop dramatically and that they can flow many more projects through without adding resources. Critical Chain uses a statistically sound method of protecting projects while removing harmful old metrics. The “Relay Runner Work Ethic” becomes the new way of project performance.
Most people that face the daily challenges of a production environment blame their management problems on “Murphy.” Murphy occurs when, for example, suppliers deliver late or with poor quality, machines break down, tooling fails, and many other unanticipated problems occur. As illustrated in Dr. Goldratt’s best-selling book, The Goal, TOC proposes Drum, Buffer, Rope as a way to success in spite of “Murphy.” Through the application of the compelling Five Focusing Steps of TOC, clients claim to have reduced lead time by half, within a period of less than a year. Furthermore, the approach dramatically simplifies daily operations while providing a practical process of ongoing improvement on the shop floor.
Establish a pull system, with just the right inventory in the right place at the right time. Increase total supply chain Throughput by reducing obsolescence, increasing shelf space variety, lowering stock-outs of favorite products and reducing lead time for replenishment. TOC’s distribution logistics provides a compelling alternative to the traditional “min/max” approach to inventory management. While significantly reducing overall inventories, the TOC Distribution Logistics method simultaneously raises the service level. Re-ordering is handled quickly and directly by rules, rather than by exception. Trends are noted and acted upon automatically, to reduce risk and increase sales across the supply chain.
Seven Reasons to Hire Allenvision
Many consultants will tell you what to do — after we jointly determine what need to be done — we work with you to show you how to do it. While we are happy to undertake the complete implementation of a project, we prefer to coach and teach your team how to do it. We believe that success growth is mutually beneficial for us.
From filling a short-term executive gap to the implementation of a major program of organizational structural change — hire Allenvision. We provide valuable expertise and insights to help you achieve your goals and execute a strategy.
When is the right time to hire Allenvision?
What on-going steps should you take to ensure you get the best out of a client-consultant relationship?
- External validation: Allenvision has a broad overview, understanding, and external perspective. We use an evidence-based approach in all of our work. A second opinion can provide reassurance before making a critical business decision.
- More time and cost-effective: We focus on a project and see it through on deadline, without distractions and day-to-day pressures. This often makes bringing us in much more time and cost efficient than running a project in-house.
- Specific knowledge, skills, and experience: Allenvision gives you the opportunity to bring in niche skills, without the commitment of employing someone.
- Ability to challenge: Our objective position means Allenvision can bring a fresh perspective. We are not afraid to challenge, and our unique position means we can do so without the fear of reprisals that your employees might have.
- Impartial advice: Hiring Allenvision can offer you a way to reach or justify a desired conclusion and avoid internal conflict. This can be particularly valuable in stressful situations such as job cuts and significant operational or strategic changes.
- Knowledge of best practice: Allenvision works with multiple clients and often serving various clients facing similar problems across different sectors.
- Access to information and resources: Allenvision specializes in dealing with matters related to people, money, and governance. We can bring in data and systems that may not be financially viable for your company.
Overall, Allenvision brings a wealth of strengths to your business and can deliver a full range of services. So, if you are seeking a solution to a particular business problem, developing your employees, creating succession plans, undergoing organizational change or can see new market opportunities but lack the resources to follow them up, Allenvision may be the answer you need.
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