Operational Governance – Building on P-D-C-A
Governance is the act or system of governing. Governing is to control and direct the making and administration of policy. So governance is expanded to mean a systematic approach to how policy is created and deployed. Operational Governance, sometimes referred to as Business Governance, is a commercial entities application of the concept.
Every company has a governance system. The question is simply how effective is that system. To gauge effectiveness, measure a companys rate of improvement and its ability to change directions. In other words, measure a companys ability to either drive change or respond to change and youll have a good sense of its operational governance system.
To gauge a governance systems capability, in addition to measuring its effectiveness according its industry parameters, you should also look to see if there is evidence of the key elements in the form of activities.
an Executive Brief that describes a framework for operational governance that can help you drive real value (ROI) from your operational excellence programs.
A classic model that can be used to establish and measure a governance system is Policy Deployment. Look for the Plan-Do-Check-Act (PDCA) phases of Shewharts cycle or the cycle of Demings modified Plan-Do-Study-Act (PDSA). The cycle speaks to the intended iterations that increase the level of performance.
We take the discussion to the next level by laying out activities within each phase of the cycles that can help an organization. Scorecards and Dashboards within the Plan phase. The execution of value streams within Do. The creation of a system of Key Performance Indicators and their constant evaluation against actual performance can fulfill the Study/Check phase. And finally, improvement activities to close performance gaps constitute the Act phase.
We also consider the creation of a well-organized project pipeline to be the link between the Study/Check phase and the Act phase. It documents the outcome of Study and the path on which to Act. The project pipeline is the transition point from operational governance to operational improvement.
In fact, we take the four elements of the Shewhart or Deming cycles and think about their movement not as much as a sequential cycle but more like four pistons in a car engine. Each of them pump on their own cycle but they have a timing that is synchronized and together move the car.
Operational governance systems can be expressed in many ways. Policy Deployment is a classic framework. Each is a systematic approach to how policy is created and administered or deployed. We developed our operational governance system in detail by working with leading companies in many industries and varied countries. Yet, it still aligns with a classic like Policy Deployment. If youd like to discuss how our detailed plan for governance operates, feel free to contact me.