What springs to mind when you hear the word “governance”? For many people, it’s bureaucracy. They see a thick manual of policies and checklists, a central committee that delays decisions, or an endless round of audits and compliance checks. The next thing that comes to mind is skunkworks—how do we go underground to avoid the governance police?
It doesn’t have to be like that. Governance isn’t about compliance. It's about making good decisions in an efficient way.
What Is Governance?
My preferred definition comes from the Institute on Governance. They’ve defined governance as “the process whereby societies or organizations make important decisions, determine whom they involve and how they render account.” This identifies four key aspects to governance:
Software development is knowledge work. It’s all about decisions—which features to prioritize and which to delay, which design trade-offs to emphasize, where to allocate our effort, and so on. Good governance ensures that we make these decisions as effectively as possible. We involve the right people in the right way, and we learn and refine as we go along.
Conversely, poor governance leads to poor decision making. We waste time on trivial decisions. We involve people who lack the necessary expertise and understanding. We define bespoke processes for every decision. We get bogged down in politicking and infighting as people argue about decision rights. And, at the end of all this, we’re left with decisions that don't stick, either because they lack legitimacy in the eyes of key stakeholders or because they aren’t grounded in solid evidence and analysis.
The sad fact is that organizations that don’t address governance end up spending a lot of time on it. They discuss it afresh for each decision as they design the decision-making process and argue about decision rights. They’re then left with little time to gather data, analyze options, and make the decision, so they make bad decisions.Central or Devolved?
How is it that governance often turns into bureaucracy? This tends to happen when people equate governance with centralized control. They reason that centrally enforced policies, priorities, and standards make it easier to ensure that everyone acts in a way that aligns to corporate goals. Further, they reckon that centralization builds consistency, making it easier to coordinate distributed teams and move work or people between teams.
There’s some truth in this, but there are also countervailing pressures. For example, devolving decision making to individuals and teams ensures that decisions will be more closely attuned to local circumstances. It also shortens the chain of command, allowing people to make decisions more rapidly. Such speed and situational awareness are often key requirements for good decision making.
Many executives find devolved decision making scary. Things move quickly and not always in the direction they expect, but this may just reflect the realities of software development. Local nuances can have a large impact on the effectiveness of a team or the validity of a solution. In such circumstances, centralization merely gives the illusion of control.
Defining appropriate governance structures, then, is about balance. We need to balance the benefits of centralized and devolved control. Here are some factors to consider when doing this:
The balance point will vary from organization to organization, as factors such as culture, market environment, and the mix of products and technologies come into play. It will also vary from decision to decision within a single organization. Good governance builds a range of decision-making mechanisms, each tuned to different circumstances.
The balance point might also be dynamic. For example, if you’re experimenting with a new technology, then it probably makes sense to devolve decisions initially while teams learn how to handle it. But, as understanding grows, you might want to centralize some decisions in order to ensure consistent application of your newfound knowledge.
It can even make sense to rotate between the two poles. This can help transfer knowledge. People bring local knowledge from the field and share it more widely when they centralize. They then build specialist skills to take back into the field when they next decentralize. I haven’t seen many organizations that are smart enough to do this consciously, but it might be the main benefit they get from their regular reorganizations.
Other Decision Attributes
This trade-off between central and devolved control is at the heart of good governance. However, it’s also worth considering some other attributes of your decisions:
The important thing is to think clearly about your situation and the decision-making mechanisms that fit it. If you only start thinking about decision making when in the midst of a crisis, then you’re unlikely to make good decisions.
And remember the fourth aspect from my definition of governance, accounting for outcomes. Monitor the effectiveness of your decision making, and work to improve it as you learn more.
Governance is an ongoing process, not a one-off. If we don’t look after our governance structures, then they tend to degenerate, either toward anarchy or toward bureaucracy. Conversely, if we maintain them carefully, refining them as we learn, then we’ll be rewarded with flexible decision-making processes that consider all the important factors and win the buy-in of all key stakeholders. The price of good governance is eternal vigilance.