The discussion of program governance is high on the list of learner expectations in my Leading Strategic Initiatives seminar. “What’s healthy governance practice?” I’m asked, “Where do I start?”

Since I’ve been writing this blog for several years, it might be wise to revisit the definition of strategic initiative and clarify the role of program management. Strategic initiatives are not the same things as goals or objectives; they are endeavors that close a performance gap. All strategic initiatives are programs, but not all programs are strategic initiatives.

Since a strategic initiative is (by definition) a particular kind of program, program management becomes a vital competency for the execution of strategic initiatives. Programs are often confused with large projects or with multiple projects. Rather, programs provide a kind of synergy (in the way of benefits) that separately-managed projects cannot provide.

Governance is a word that lacks a precise definition, and some people confuse it with government.  I believe that when you examine the bureaucratic actions recommended by some program management gurus and practitioners, you end up with a simple idea: program governance is about making decisions. From this, you can make a simple assertion that good design of governance leads to good decisions.

Three Common Mistakes in Design of Program Governance

I’d like to quickly mention three common mistakes that I have seen in program governance. They imply the need for thoughtfulness in design of program governance:

• Overlooking the importance of strategic alignment.  To this, I add there is a bigger problem that organizations don’t have good strategy, and substitute goals for strategy.
• Not distinguishing management from reporting. I say this because many program managers (or portfolio managers, for that matter) only collect and “roll up” project data for submission to higher management levels.
• Drawing a program organizational chart and calling it the “program governance structure”

Four Recommendations

Here are four principles of program governance design, starting with the simpler ideas.

People respect what you inspect

This is a simple principle. As a strategic initiative leader, I need to convey what is important and do that by taking time to look at and discuss the “things” that I know are important.

Too often, program managers focus on metrics that are easy to collect or are familiar.  All of us know that when the CEO comes to our site for a visit, there is a lot of energy on cleaning up the physical environment. That’s nice, of course, as mess and clutter is can be a sign of laziness and sloth. A strategic initiative is a program to close a performance gap. What are the leading indicators and small wins that influence the closing? Are you looking for them or are you distracted by housekeeping chores?

Allow for mistakes

Smart people want some discretion and latitude in the program. They don’t want bureaucratic rules. They want to get things done.  Thus, governance needs keep decisions decentralized.

Yet, people are human and they make mistakes. So the important point of design for governance is to recognize that mistakes will occur and be ready to keep them from escalating into bigger ones.

Obviously, you want to avoid mistakes. For that you need to encourage people to stay aware for the presence of mistakes, and – this is crucial – make sure they avoid making the mistake worse. For example, covering up mistakes seldom works. Blaming others tends to make for a toxic culture.

You want to selectively impose policy

A natural tendency for some program managers is toward consistency and control of all elements of the program. This can be stifling for the strategy, as understandably will not want to give up something or change something that they think is important to their success and to the enterprise’s success.

The key question for any program policies is, “Does this policy make sense with respect to the strategy? Alternatively, the question is, “Are the benefits worth the cost.”

To be able to answer that question well you need to have a sense of focus and leverage. You can’t ask for control and consistency everywhere; there’s little value to be added. You have to think and act strategically.

Design so that the organization is concentrating on the decisive aspects of the strategy

It might be best to use an example. Domino’s Pizza had a strategy of countering social media complaints, reinvigorating its brand, and upping revenues depended upon reinventing its core product (the pizza) through one simple goal: making a defensible claim that it had the best-tasting pizza in independently conducted taste tests. That claim was the decisive aspect of its strategy, and would determine if Domino’s strategy would succeed.

The program governance structure for this strategic initiative was very informal.  There were not formal executive briefings with project updates. The program design reflected is strategic focus on careful design of experiments and rapid consumer feedback.

Conclusion: Strike a balance

Program governance usually comes down to striking a balance among conflicting needs and goals, which arise in various areas for many reasons.

The higher level needs are to balance business needs (How are we changing revenue or cost structures to create value?) and risk management (How can we preserve value?)

As a program manager, I have two highest-level responsibilities. One is to the sponsoring organization and is practiced through the disciplines of strategic alignment. The other is to the projects that make up my program. Good governance is an effective balance of those two responsibilities

Do you agree with the claim that good design of governance leads to good decisions? What else should be considered as essential to program governance?