Governance versus Management

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I keep hearing about how we have to improve our “governance”, make sure that the “governance” structure is correct, come up with terms of reference for the “governance” groups and so on.  But does anyone really know what governance is?  If we adhere to ITIL then according to the ITIL Service Strategy Guide:

Corporate governance refers to the rules, policies and processes (and in some cases, laws) by which businesses are operated, regulated and controlled.

So, that’s kind of what you were thinking, wasn’t it?  Make sure that people are doing what they are supposed to be doing.  It’s important to understand, however, the difference between governance and management as there is a very distinct difference:

Governance is performed by governors.  Governors are concerned with ensuring that the organization adheres to rules and policies; but even more, that the desired end results are being achieved in doing so.

Management is performed by executives and people who report to them.  Their job is to execute the rules, processes and operations of the organization, according to the governance policies, and to achieve the strategies defined by the governors.  Managers coordinate and control the work that is being required to meet the strategy, within the desired policies and rules.

It’s a little bit hard to digest the differences because many organizations normally merge the two pieces together.  Oh, they say that they are separate, but are they really?  There are a number of things that a governance group needs to do.  Six principles, in fact:

  • Establish responsibilities
  • Strategy to set and meet the organization’s objectives
  • Acquire for valid reasons
  • Ensure performance when required
  • Ensure conformance with the rules
  • Ensure respect for human factors

So, where am I going with all this?  I’m trying to make sure that people understand that governance and management are two different things.  Management is the day to day activities while governance is the direction setting.  Yes, governance can “ensure performance when required”, but with an effective management that should be rarely required.

In my opinion, not backed up by facts, just observations, people have a tendency of trying to compensate for a lack of adequate management with more governance.

For example, the chicken coop has a hole in it that is so big the fox can grab chickens, but instead of fixing the coop we add more guards.  The strategy for the organization is to produce eggs to sell.  Losing chickens endangers the strategy so it seems obvious that this impacts the strategy and therefore we need more governance.  But remember, governance does not mean management.  Governance will not fix the coop, management will.  Governance will say that the strategy is not being met, but management already knew this, should have already known this.  Management needs to fix the coop.

What is the right amount of governance?  The right amount of governance is that which gives the right people the information at the right time.  Technology and process can play an important role here.  With the correct technology in place, the amount of governance can be reduced because more people have access to more information at the time of their choosing.  Why produce a monthly report if that same report can be generated on demand.  By generating on demand you eliminate the middleman, allowing those that want/need to know, to get the information when they want to, not when someone decides that it is time for a report.

Or in other words, why have a monthly status report when you can have a weekly on-demand report?  I know the answer:  management.  Many managers fear the status report and try to sugar-coat the situation to make it more palatable for consumption.  It is that sugar coat that causes problems.  Tell it like it is.  I’ve personally seen over the past few months, the tendency of project managers to make the status of their project “Green” even when it is not.  Even when the raw data they present indicates that there is a problem, they still mark the status as green.  Why?  It stops questions from being asked.  It makes people feel better.  This is not a governance issue, it is a management issue and we need to understand the difference in order to solve the correct problem.  Solving the wrong problem does nothing for the organization except that it allows the fox to continue using the coop.

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