Tuesday, May 31, 2022

Innovategovernance

Compared to traditional governance approaches which focus on compliance; effective governance today should understand performance and compliance are the two sides of the same coin.

To survive the “VUCA '' new normal, GRC becomes more critical than ever in digitalized organizations with extended business boundaries in an increasingly flat world and the desire for more innovation will make governance issues more complex. Corporate governance includes interdisciplinary principles and practices, helping to manage collaborative business results with consistent deliveries. 

Statistically, the organizations with governance competency will outperform competitors significantly. Without it, the law of entropy takes over and any orderliness disappears sooner or later.

Value-driven governance helps to maximize multifaceted business value: Business value is an informal term and could mean different things to different people. Value is tricky though because it's subjective in the eye of the beholder. The value of contemporary business is multilateral. The whole value chain needs to be aligned, engaged, contributing so customers and stakeholders get their fair share, and define the ideal business model, distribution, products & services, and business brand. The key point is, value is multi-dimensional and perception-based. Governance as an approach is an enabling vehicle to realize multifaceted corporate value.

The senior leadership teams need to leverage upon asking and clarify: Can we drive the Enterprise and Business Strategy forward smoothly? Does a strategic governance discipline help to streamline operation and make it more effective, but slightly slower? Do we have common values and a dynamic enterprise business model that takes into account initial customer investments, life cycle of our customers, products, services, economic cycles, market shifts to ensure flexibility and positive results throughout? Does the faster operation at daily base help to achieve the good or worst strategy result for the long term? Are there ways of combining the freedom and flexibility advantages of self-management with the control and coordination advantages of traditional hierarchies? At the strategic level, the executive team shall make well-informed choices which include considering the business impact of different approaches, the pattern of benefit delivery, the risks involved and what else is going on in the portfolio.

Conscious and agile governance improves organizational agility:
Governance will remain a difficult issue for today’s business, True enterprise-level agility requires the architectural coherency that comes with a business vision realized through conscientious governance. Thus, the corporate board’s oversight is important. Culture resistance to governance from project-focused staff who argue that governance hinders agility. But this argument confuses project-level freedom with organizational agility. Some governance causes mediocre management. Effective governance needs to ensure the business as a whole is superior to the sum of pieces. It doesn’t matter what the drive is, in a well aligned and architected organization, governance must be assessed at the enterprise level.

So the concept of agile governance is to ensure your organization optimizes the "traditional" governance to which you refer, and then determine how much you are willing to spend to make decisions faster, coherent for improving organizational level of agility and maturity. The Boards of Directors as governance authority enhance good policy making, work closely with management to ensure the organization is running in the right direction with appropriate speed.

Cross disciplinary governance improves organizational transparency, information fluidity and innovation competency:
It is true that information technology grows exponentially even in the case of the digital paradigm shift. How the social and technical aspects of a workplace fit together directly impact the effectiveness and maturity of the company. Technology centrism becomes multidisciplinary. It is also true that the growth of technology may trigger a paradigm shift. you need a business steering instrument such as GRC mechanism aligned with the business culture and process to improve business transparency and effectiveness.

To actually facilitate change or movement in a company, businesses need to take a systematic approach to orchestrate change, do it with trust and flexibility. Governance should be understood via multidimensional lenses such as innovation, people, and multidimensional value perspectives, and be enforced holistically. When governance is done properly, it actually is a great tool to facilitate innovation. Governance structure is independent of management structure, governance mechanism can be embedded into business processes seamlessly, and governance practice should be shared cross-enterprise collaboratively to unlock business performance.

Compared to traditional governance approaches which focus on compliance; effective governance today should understand performance and compliance are the two sides of the same coin, oversee the crucial business components and ensure the organization as a whole is superior to the sum of its parts. As a matter of fact, running a digital organization needs to ensure that innovation can be catalyzed under the proper governance disciplines, rejuvenating their organizational culture for adapting to change and improving business long term competency.










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