Governance & Oversight

This page focusses on the concepts of governance and how it can be applied in modern business cultures and organisational paradigms.  We strip back the concept to be able to reconstruct it in a way that provides the senior leadership of a business with what they so desperately seek from the practise of governance, reassurance.

Governance is often seen as a dirty word in modern companies

In an Agile context, governance focuses on outcomes and coming up with flexible, agile ways of meeting the business’s needs.  We are not governing exactly how people work.

Traditionally (pre-green organisations), a Board would demand plans and requirements, but those documents were not what they really needed; they were just a means to an end... although rarely actually getting to the end efficiently, if at all.  Their decisions were rarely based on the information contained within the planning documents.  So why ask for these plans?

The Board wanted to see those details only so that they could have confidence that the team knew what it was doing, and that it was putting appropriate thought into the project or undertaking.  This traditional approach tended to encourage a wide range of counter-productive behaviours from both leadership and the team.

Governance is Required

Senior leadership (SL) should of course focus on meeting the Board’s needs, but there is a better way.  Once SL understand what the underlying need is, they can meet this in a flexible, agile way.  When outlining goals, acknowledge uncertainty, open things up for discussion and create a culture of frequent check-ins to reassure the Board and give them a chance to voice concerns.  As a senior leader, you should frequently meet with your teams, as well, to make sure everyone is on the same page.  This is not micro-management, this is engagement and oversight.  But of course, it's imperative to be mindful of the purpose and the nature of this regular meeting.  Be careful to set the right levels of delegated decision-making authority and proactively work to increase it.

The details of this process will be unique in every instance, but it’s essential to come to the process with an outcome mindset (see next).

Governance and oversight often get used interchangeably.  But you don't come here, to VFS, for generalisations do you?  You expect pedentry.  Oversight is a critical component of effective governance, but it does not mean governance.

So hang on.....what actually is governance?  And what is oversight?

What is an outcome mindset?

As Steven Covey said, "Begin with the end in mind".  Striving for an outcome is to focus and to remain mindful of your goal and what it is you want to achieve, before any specific outputs you need to produce or activities you need to do. 

An outcome mindset is one of purpose and value-centred work, and can lead to a greater sense of self-worth.  It is a common trait of many great leaders.

Oversight is composed of “over,” meaning above, and “sight,” meaning looking, but not touching. Indeed, those in charge of oversight functions are asked to look at a process, program, or project from above, but not to get involved in its day-to-day management.

Note that engagement and oversight are different practices.  Oversight is a subset of practices required by governance that is essentially not engaging with the people working within the scope  of the governance.  This might mean relying on KPIs, measures and metrics.  We will get to this shortly.

Governance is the process of interactions through the laws and norms of an organised society over a social system through which issues of common concern are decided upon and regulated.  See Gemba Walks for an example of interaction and engagement.

Governance can be different in an agile working environment

We started off by making the statement that 'In an Agile context, governance focuses on outcomes and coming up with flexible, agile ways of meeting the business’s needs.'  Whilst this is not limited to agile working environments and agile cultures, it's important to stress this point.  That's because agile principles and practices are fundamentally about reducing business risks, in-particular in high vuca situations, just as traditional governance is but in a very different way.  Agile governance and traditional governance are two diametrically opposed management philosophies and as such can cancel each other out if attempts are made to apply both simultaneously.

In an agile working environment, work is prioritised, decomposed and defined so that real business value is delivered early and often.  One risk that this helps to manage is project budget because the team deliver increments of the project way before the budget may run out.  And with each increment done, it's far easier to ascertain whether the existing plan remains the right course of action or if there needs to be an adjustment...a course correction.

Because an Agile project begins delivering valuable capabilities long before the budget is exhausted and delivers them in prioritised order, we can stop work when the budget runs out and know that the money was well spent.

When you focus on continuous delivery, you see results very quickly, and it’s easy to change a process or pivot to a different priority if we aren’t seeing the results we wanted... or, of course, if we meet them sooner than expected. 

Measures & Metrics

Of course, there is still a place for measuring progress and other internal process aspects to help predict problems before they happen and to identify areas of concern where senior leadership can actually offer support.  This is one method of oversight, practicing watchful care.  Effective use of OKRs and KPIs, coupled with a sound appreciation of the Trust-Transparency Loop help to instil good oversight practices.

So what Is Governance?

And why did we leave this section until the end?  Well, we're not actually proposing a different definition to many that have existed for decades.  In fact the definition below is from a Canadian Public sector document from many years ago that we have used to cement this point.  However, when read in the context of how it should be implemented in a modern, high performance and high ownership workforce, it takes on a different meaning.  And this is why we left this section to the end...you can read a different meaning into the same words.

While governance includes oversight, it is a broader concept. Governance refers to the structures, systems, and practices an organization has in place to:

The basic principles of good governance ensure:

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