How to Get Transformation Governance Right

One of the success factors of top transformation leaders who outperform most others is a solid understanding of how critical transformation governance is to the success of their initiatives. While their SMAC experts will be eager to leverage social, mobile, analytics and cloud technologies into the company’s ecosystem, top transformation leaders are focused on the more fundamental success factors that will help render them, their teams, stakeholders and organisation successful.

The origin of the word “Governance” comes from the Greek verb “Kubernáo”, which means to steer. Put simply, if the right mechanisms are not put in place to steer transformation, the results should be obvious. And the more complex the transformation, the more lost it can become when not steered using the right mechanisms.

Without the right transformation governance, even the finest teams of digital talent, functional leads, project and change managers, will eventually run into the muddy waters that many transformation teams find themselves up to their necks in. This often triggers actions that address the consequences of inadequate governance, but not the governance itself. And so a recurring episode begins in a transformation saga that will remain destined for trouble until the underlying issue is properly addressed.

Key Transformation Governance Questions

A thorough assessment of governance in any transformation initiative will involve many questions, which typically reveal gaps that represent fundamental risk for the entire initiative, not to mention the reputation of senior management and other stakeholders.

Three basic questions leaders need to ask are:

1. Is the governance structure effective in dealing with the transformation’s complexity?

2. Are corporate governance bodies provided with clear and accurate views of transformation status?

3. Is there an integrated assurance plan that enables governance to manage risk effectively?

And consider this one too …

While we expect effective governance to be in place within our HR, Finance, and other functions, are we not risking our future by undermining our transformation governance needs?

Learn From The Classics

Wise transformation leaders reflect not only upon their own experiences and best practices, but also upon the lessons learned inside other transformation initiatives, to ensure their transformation governance is effective and fit for purpose.

Two British classics to learn from include the BBC’s £100m Digital Media Initiative and the Co-op Bank’s £300m transformation. Countless others are documented and on display to remind the leaders (and former-leaders) of these and other organisations, the mistakes that can cost a company and its leaders dearly.

Without well constructed governance, chaos, confusion and political collusion can hinder the effort from start to finish. This will serve to put the entire initiative at risk, until it receives the attention, expertise and sponsorship it deserves.

Project Governance Is Not Transformation Governance

It’s not uncommon to find leaders charged with leading complex transformation initiatives who believe the only governance they need is established at the project level. To be blunt, this smacks of transformation inexperience that will undoubtedly put the prospects of transformation success at serious risk.

There are multiple management layers in complex transformation, each of which requires its own governance, and project governance is certainly not what the two classic transformation failures above suffered from. Transformation brings together multiple lines of business and stakeholders, which sets the scene for some extreme human-dynamics. Without effective transformation governance, these dynamics can, and will bring many transformation initiatives to their knees, with key players and even vendors sent packing – not to mention the delays that gradually diminish return on investment.

Ten Critical Success Factors For Digital Transformation Governance

If your organisation is already practicing effective programme and/or portfolio management, the chances are that you already have the right people with the right capabilities to help ensure your transformation governance is effective in its design and implementation.

In an event I attended in late 2015, George Westerman of MIT Sloan and Sanjay Saraf, Senior VP and CTO of Western Union Digital, shared ten of the critical success factors for digital transformation governance:

  • Clear digital decision-making roles
  • Mutual Business and IT activity; often CIO enables, and a CXO leads
  • Operates at the right pace
  • Funding model recognises different types of investment, not one-size-fits-all
  • Monitors and “pulls plug” on failing initiatives early
  • Process ensures all elements, not just technology, are considered before funding happens
  • Clear measures of expected value and how it will be counted
  • Business leads are accountable for the results
  • Process examines actual vs. expected outcomes
  • Clear exception process

Custom Governance Frameworks

George Westerman and his fellow-authors Andrew McAfee and Didier Bonnet, dedicated a good number of pages in their book Leading Digital to digital transformation governance. They suggested three key areas deserve careful consideration when creating a custom governance framework for digital transformation:

  • Governance Committees – which make strategic and investment decisions, prioritise resources, and establish standards and policies.
  • Digital Leadership Roles – which orchestrate change, prevent silos, and help local units know when and how to adopt enterprise solutions and leverage centralised resources.
  • Shared Digital Units – which foster innovation, and create synergies around infrastructure, tools, standards and capabilities.

Don’t Replay the BBC Episode

Transformation, people and careers will suffer if governance has been introduced with little thought or transformation governance expertise behind it. It will lack the elements that can steer the transformation effort, channel the energy of the people in one direction and minimise any side-winds that might attempt to push the transformation vessel off course.

Give governance the attention it deserves and don’t replay the BBC episode by undermining what is likely to be one of the most fundamental success factors of transformation success.