Operational Governance
Your enterprise is established, with a clear market position and secure revenue streams. But innovation comes slowly or not at all. You think you need better ideas. You’re probably wrong. The ideas are fine. The problem is that you can’t execute on those ideas in a manner that is timely, flexible, extensible, or inspired.
The factors that limit your ability to deliver aren’t endemic to the delivery itself, but rather the negative space that surrounds that delivery. They are the attributes of your product development environment: the connective tissue between the assorted functions that work together to execute on great ideas.
You can’t innovate because your product development environment simply isn’t healthy enough to support further growth and optimization. It doesn’t engender teamwork, creativity, dedication, introspection, and risk-taking. Your environment lacks adequate Operational Governance.
Operational Governance
I say “Operational Governance” and some folks do an eye roll, like I’m here to erect barriers and slow down progress. But just the opposite is true. Humans are faint-hearted creatures. We need to feel safe, appreciated, and inspired to work at our best. Create an environment that delivers on those resource needs or suffer delivery that continually bumps along the bottom
Humans are faint-hearted creatures. We need to feel safe, appreciated, and inspired to work at our best.
There are as many nuanced ways to optimize operational governance in your enterprise as there are connections between hard and soft tissue in the human body. But, like in the body, there are a few critical joints that handle most of the heavy lifting and are most prone to stress. I’ve enumerated some of these, below.
Corporate Strategy
What does strategy have to do with operations? EVERYTHING. Strategy provides the map that resources and teams depend upon to stay on-track when the going gets rough. Strategy isn’t just heady notions handed-down by leadership. It is a process that runs top-to-bottom in the organization, resulting in resources who clearly understand mandates and underlying business drivers, as well as a set of lucid, tactical actions identified to drive those mandates forward [ https://medium.com/@drewharteveld/laddering-down-to-tactics-a0b7ef28b42c ]. If the strategy is not effectively documented and socialized, then the only way to keep initiatives ‘on-strategy’ is to keep strategic leadership continually involved in them. This not only limits scale, but also keeps the line resources/teams from recognizing holistic ownership over the assets within their own jurisdiction. Great strategy is bi-directional: it may be formed at the top, but its efficacy is continually validated and tweaked based on ground truth.
Demand Management
The greatest measure of our value to the enterprise is the products we deliver to it. Even the largest companies experience withering internal competition for the time and engagement of key resources. For most successful companies, even cash is less valuable than opportunity cost where the attention of those varsity squad members is concerned.
While working efficiently to create products is pivotal, its all for naught if we are building the wrong products. Demand Management describes the process through which new product ideas are germinated, decisions are made about which ones are worthy of investment, and actual progress is tracked against forecasted KPIs.This is a critical function, and needs to be conducted with strategic traceability, transparency, and a healthy respect for ground truth.
Flexible Execution
Most struggling companies don’t fail due to a lack of good ideas. Humans are wildly creative, particularly in the clutch. What knocks down most firms is an inability to effectively execute. Bureaucracy, internal squabbling, a desire for perfection, and deeply-ingrained operational modes all conspire to steal the momentum from product development.
Fix this by shifting to an iterative operating model. Define ideas, render them down to their critical elements, and validate these elements as quickly as possible. Pivot away from a “plan everything and then execute en masse” mindset to a “Pilot-to-Production” posture. We can call this Agile, or Lean, or Scrumerfall, or whatever syntactic cocktail is necessary to secure necessary buy-in within your organization. But the mental shift is key. We need to shake out of our Waterfall mode of thinking, and embrace an Agile approach, instead. [ https://medium.com/@drewharteveld/brittle-pile-of-assumptions-83fd93145218 ]
Jurisdictional Authority
A great CEO took over a company where I once worked, did her 12-week initial walkaround, and concluded, “You guys are all fantastic, but nobody knows how to swim in their own lane…” Humans are orderly creatures and require clear operational architecture to work at their best. A lack of clarity about who owns what products, departments, processes, or decisions begets chaos and despair.
“You guys are all fantastic, but nobody knows how to swim in their own lane…”
Decisioning is the fuel of business, and without clear jurisdictional authority, decisioning grinds to a halt. When two resources are bickering about a pivotal decision, the problem isn’t with those resources — it’s with their boss. Clear accountability is impossible without clear authority. And authority can’t exist unless senior leadership is willing to cede it to resources throughout the organization. Knowledge workers yearn to own something. If you lack the confidence to provide those on your team with the authority to make and learn from their own mistakes, you have a resource problem. That problem might be them, or it might be you.
The places where jurisdictions rub-up against each other present particular risks and opportunities. These are the spots where authority needs to be managed with nuance and magnanimity, and where the greatest creative leaps have the potential to occur.
The Cult of Momentum
Every workday presents an unending stream of decisions to be made. Some are highly tactical, perhaps surrounding a specific coding structure or user interface design element. Others are more strategic, such as what market segment to target and which others must be abandoned to facilitate that focus.
Enterprise decisioning is always driven by a default posture, based upon the culture of the organization. Due to the structure of risk and reward in modern business, as well as legitimate corporate and market constraints, these cultures often migrate to a conservative posture over time. It’s safer to keep talking, to secure buy-in, to write more documentation, to distribute authority… Sadly, these postures squander the single most valuable resource in the product development process: momentum.
It’s safer to keep talking, to secure buy-in, to write more documentation, to distribute authority…
Momentum creates positive morale, quickly validates assumptions, and delivers value to the enterprise in the form of actual deployed products. Momentum sheds drag, and, like a boat getting up on plane, hits a tipping point at which the team skims the surface at maximum velocity. Momentum is a force-multiplier — the very act of going faster creates an environment wherein additional speed becomes possible.
Momentum isn’t about recklessness, or corner-cutting. Momentum is about a default decisioning posture that says, “Yes. Let’s try and see what we can learn. Let’s start right now. Let’s allow our navigation to be guided by the areas where we demonstrate the most success.”
“The way to get started is to quit talking and begin doing.”
— Walt Disney
Too many enterprises smoother the baby of innovation in its cradle with a pillow made of the constraints and demands around an eventual elevation to Production. Let’s nurture those ideas instead, to see if they even have a future. We can talk about how to productionalize them when the time comes — and refactor as necessary at that juncture.
The largest contributing factor to momentum isn’t the personalities of individual resources, but the culture of experimentation that is established from the top of the enterprise. Platitudes don’t cut it — resources need to see momentum nurtured and celebrated continually over time.
Operational Debt
Every organization accrues operational debt, and some of the most successful include those with the largest associated backlogs. Operational debt can be technical in nature, or rooted in process, or even cultural. Operational debt almost always includes a historical component.
Operational debt is rarely a positive, but doesn’t necessarily have to manifest as a negative, either. The trick with operational debt is that it is recognized, understood, and estimated as a component of the ability of the enterprise to move forward. Like so many types of risk, operational debt is natively invisible. That means unless it is actively exposed in a way that leadership can understand and action upon, they will be unaware that it even exists.
The trick with operational debt is that it is recognized, understood, and estimated as a component of the ability of the enterprise to move forward
Enterprises run-aground when they don’t clearly expose the debt burden that they are dragging with them, and its indirect impact on their ability to innovate:
“We’d love to do X, but unfortunately a bunch of those key fields are locked in Y system where we can’t get at them…”
“Those features exist in the newest version of the platform, but we can’t upgrade because that version doesn’t integrate with our older version of the general ledger…”
“We can’t move forward until we can get Roberta in the room, because she is the only person left in the company who understands how that part of the business actually works…”
“Executing on that would require Marketing and Infrastructure to closely collaborate, but those guys can barely tolerate each other…”
Debt is paid whenever possible, either via its own dedicated projects or as a component of larger initiatives that demand its payment for their own success. No modern enterprise can realistically shed all of its operational debt — the cost to close all of those loops would just be too high. But smart enterprises bother to expose, define, and highlight these risks so that everyone clearly understands their impact on our ability to drive the business forward and make smart decisions along the way.
Relationship Management
Most successful enterprises have mastered the art of relationship management where interfacing with external customers and partners is concerned. There is universal agreement that these relationships need to be owned, managed, and nurtured over time. There is also an appreciation that while established process might be the most efficient way to route activity through the enterprise, the occasional situation demands a more nuanced dialogue only available via conversation with a trusted partner.
So why is this universally-accepted philosophy only applied to external stakeholders of the enterprise?! Internal customers are customers as well, and deserve to be treated with the same level of service as our external clients. Internal relationship management is arguably more important than that facing external customers, because the work we are doing inside the firm is often more theoretical than that which we expose in the market.
Creating a program of internal relationship management doesn’t have to cost a fortune. It’s more about expectations, cultural norms, and accurate support modeling throughout the existing team than about standing-up an org of internal relationship managers. At one company where I worked, this function was enabled by creating a “Digital Buddy” program wherein existing director-level resources on the digital team divided-up the internal customers so that each had a ‘go-to-guy’ which whom to collaborate on digital issues. I was thrilled to adopt the extra jurisdiction, learned a ton, nurtured some strong relationships, and collaboratively built some kick-ass software.
Internal customers are customers as well, and deserve to be treated with the same level of service as our external clients
Relationship management is the connective tissue that allows the enterprise to move with speed, flexibility, and coordination.
Tying it all Together
Western business has advanced dramatically during the past five decades, fueled by computational tooling, communication networks, and automation. Most of this advancement has been in the vertical dimension, optimizing areas of specialized thought and execution. Operational Governance is focused on the horizontal dimension instead, establishing an architecture through which all of these optimized silos can collaborate effectively for the common good of the enterprise.
Maslow’s Hierarchy of Needs clearly establishes that while humans are capable of fantastically creative thought, they can’t get there until they feel confident about their underlying safety and security. Operational Governance envisions a set of rules, norms, and structures intended to clearly define a foundational platform of ‘known conditions’ that satisfy the needs of resources at work, unleashing your team to operate at its inspired and innovative best.
