Initiategovernancepractices

Governance needs to be a complementary part of strategic management.

Modern corporations are massive, complex, interdependent dynamic ecosystems. Corporate governance discipline can fulfill its purpose as a high-level business enabler by providing a structured communication bridge between shareholders and corporate directors. 

Governance can begin with setting good policies and taking an integral approach; understanding risks and conducting depending on the nature, scale, and complexity of the organization. Sound governance is part of eliminating risk and doing the right thing to improve business effectiveness and maturity.

Transmitting intended strategy into guidance during execution or idea realization: Strategic plans are living documents that require ongoing monitoring and adjustments when needed to address unforeseen changes in the marketplace. Strategic management is both a system and process to deal with dynamic and iterative planning and execution continuum. In practice, the business strategy execution gaps exist at the people’s mindsets, the organizational culture, and processes. The management and governance are complimentary interdependent disciplines to close gaps to improve business effectiveness and agility. Statistically, the organizations with strong governance achieve better profitability and higher performing results than their competitors. 

When strategy needs to be reviewed and adjusted that leads to execution, governance plays an important role in steering the organization in the right direction by setting guidance. Strategy management is good at planning, pointing out problems and tells you the kind of actions you need to take to implement the strategy; governance prioritizes and monitors business results. Some organizations distinguish the three areas of organizational structures, processes, and systems in order to clarify which impact hits where. The management spends time on putting everything together, and follows logical steps, no deviations, to implement ideas, solve problems and generate profit.

Receiving feedback from execution into where strategy needs to be modified: Strategy execution has low success rate in many organizations due to a variety of gaps or business misalignment. It is also because it is unrealistic or too costly to implement or doesn't actually fit, stretch or match the position on the ground. Talent shortage is another concern that needs to be addressed for improving strategy execution. Either change or strategy management, people are the cause and effect; contributors and beneficiaries. The management needs to collect feedback, make timely adjustment of strategic planning and improve strategy execution success.

In many traditional organizations, the feedback gaps are possibly caused by homogeneous team setting. When people are too “fit in,” they think the same and act the same, without challenging each other’s point of view; the gaps get enlarged. The excellent feedback gives you accurate information to improve; great questions to become self-aware; positive intention to change, and keen insight to grow and mature at a faster pace. But negative feedback sometimes causes confusion and creates conflicts or mismanagement. So close the feedback gaps via in-depth understanding about the quality of feedback givers, the intention of messages, and the insight about its content and context to improve business manageability.

Strong governance enhances strategic alignment and structural flexibility: Strategies for governance and risk management must be woven into the fabric and aligned with the business culture. One of the corporate governance bodies - board directors need to scrutinize management disciplines by asking: Do senior management committees make informed, proactive and timely decisions to achieve desired results? Can the management function effectively to make sure their organizations are on the right track of strategy management? Through solid governance discipline, the alignment process can become a harmonized process, business executives are eager to set stages for designing and implementing strategies, people are ready for moving to a fluid working environment.

Governance is a sophisticated process that if well executed at the demand/initiative level, it will lead to better decisions. Good corporate governance is ultimately responsible and accountable for developing and then, sustaining the environment and culture for an enterprise to prosper. Although the governance structure is independent of the management structure, the governance process or mechanism can be embedded into the business process seamlessly. It should be understood via multidimensional lenses such as innovation, people, process, technology, multidimensional value perspectives, and be enforced holistically. 

The pervasive digital means change is the new norm and happens the whole time, and thereby delivering faster and increasing market share. Digital transformation is a long journey full of uncertainty, velocity, complexity, and ambiguity. Governance needs to be a complementary part of strategic management. The governance concern is that businesses will lose sight of their prime purpose. Thus, governance as a discipline is a living breathing entity that continually requires stroking and attention.

Posted in: Execution,GRC,Principle/Practice,Strategy