Governance Planning ObservationsBy Faisal Hoque | Posted 2008-08-18 Print
Technology is the centerpiece of nearly every new endeavor, and it is the connective tissue with people and organizations outside our four walls that is critical to success.
A few general observations will move us toward a working governance plan.
Stop, look and listen. We cannot avert our eyes from the marketplace, both current and potential, nor from the details of our customers’ and their customers’ activities, nor from our suppliers and their suppliers. Sticking with our current knitting may be comfortable, but it is also deadly. Assuming anything about our supplier or customers is highly risky. We must also cast a light into the far corners of our own organizations to learn whether every employee and every operation is looking outward according to plan or merely pondering its navel.
The hierarchy is dead. Get over it. When the CEO can e-mail every employee and each can respond directly, we know the old order of managing is history. When partners outside the range of our command and control are critical to our success, we know that governance has undergone a seismic shift. When employees at the edges become our biggest asset and our biggest risk, we know that guidance has moved beyond dictatorial memos. And yet all our instincts push us to retreat to the corner office and communicate through our direct reports. Today, however, the organization that moves at the speed of a memo is already behind in the game.
Technology isn’t an afterthought. It’s the centerpiece of nearly every new endeavor, from a new product launch to streamlining a process to connecting with partners, suppliers and customers. It is strategic. It is our eyes and ears on the marketplace, and it is the connective tissue with people and organizations outside our four walls that are critical to success. It must be managed in one mind with the business, or at best it will cost us dearly and at worst it will fail us. The chasm between business and technology is perhaps the most serious obstacle we must overcome in creating an extended enterprise.
Silos are for grain. They don’t work inside or outside the enterprise for storing information or creating value. Sure, we know this, but do our divisions still operate with an “it’s them or us” mindset? Do we unconsciously treat our suppliers or customers as silos? Is the game to get as much out of them as we can?
To be effective, two general principles should guide the governing strategy that wraps around an extended enterprise:
Everyone is invited to the party. This is an enterprise-wide endeavor, a rethinking and revival of the organization as a whole. It is not a project for customer service, procurement or the IT department. As my co-authors and I stressed in Winning the 3-Legged Race, not only must the C-suite be engaged, but boards of directors must be engaged in technology beyond the CIO’s annual PowerPoint show. The board must relate its knowledge of the wider world to the internal doings of the organization. A seemingly random event somewhere in the world may in fact be the next big thing or the next big threat.
This is not your father’s outsourcing. This is not about transactions. It is about relationships. Locking in service-level agreements is not the answer. The strategic plans of your suppliers and the aspirations of your customers are the new playing field. Your communications, decision-making processes and technology must tie in. Your people will need new skills, marching orders and incentives to make it work.
Transformation, personal relationships, common vision, collaboration and trust: not radical ideas, simply the face of governance in the age of the extended enterprise.
Faisal Hoque is chairman and CEO of BTM Corporation. BTM innovates business models and enhances financial performance by converging business and technology with its unique products and intellectual property. © 2008 Faisal Hoque
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