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Entrepreneurship, governance, and striking a balance

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Decisions commit or deny staffing, time, and money. Anything else is just talking.

We’ve been talking about how organizations should make decisions in the context of governance-oriented decisions (“Who signed the Declaration of Independence?,” 2/20/2023, and “The fourth law,” 2/27/2023).

The conclusion: businesses should forgo the temptation to form steering committees … bodies whose members are responsible for representing their organizations to the committee at large. They should, instead, charter councils … organizations composed of members who bring to the council special focus and expertise on one or more business functions, but who think of themselves as leaders of the whole business.

In the world of Agile, governance, such as it is, is embodied in the product owner. And establishing a product owner does, in fact, contribute to agility: When one person has full authority to make governance-level decisions, the only impediment to making decisions is the product owner’s timidity.

This is a special case of the broader view of decision-making. Those responsible for governing (that is, governance), and beyond that those responsible for any kind of decision have five ways to make decisions:

Consensus: We all agree to it, even if we don’t all agree with it.

Consultation: Everyone with a stake in the decision shares their knowledge with the decision-maker and then trusts the decision-maker’s decision.

Authoritarianism: The decision-maker makes the decision and announces it.

Voting: There’s safety in numbers, so let’s just tally them. Nobody can blame the decision-maker for the wisdom of crowds.

Delegation: Turn the decision over to someone else and ask them to make it using one of the remaining four ways to make a decision. It’s the remaining four because delegated decisions shouldn’t be re-gifted.

These are, to be clear, decision-making styles, not decision-making processes. Continuing with the Agile example, the product owner in Agile development has full authority to make decisions the etymologically obvious authoritarian way.

But authority doesn’t constitute obligation. Wise product owners, like most other leaders, make consultative decision-making their mainstay, except for this: With non-governance-oriented decisions, consultative decision-making amounts to listening to a lot of people in order to become smarter about the subject, then making the decision.

Non-governance-oriented decisions are, that is, unstructured.

But when it comes to governance, decision-making should be structured and rule-oriented. This is true whether the subject is Agile’s product ownership, an EPMO’s (that’s “enterprise program management office”) responsibility for grooming the company’s project portfolio, or compliance-related reporting and assessment.

When it comes to governance, that is, consistency is essential. Without it, everyone who has to deal with the governance function will figure the game is rigged, and finding bypasses and workarounds is a better path to success than trying to minimize the second-degree burns to be inflicted by the function’s flaming hoops.

Bob’s last word: Read between the lines and you’ll find an unfortunate fact of life: Entrepreneurship doesn’t scale.

In a typical entrepreneurship, governance and the owner’s whims are, if not synonymous, pretty close to it. In the entrepreneur’s eyes, success comes from basing all of their decisions, starting with deciding to open their metaphorical doors for business and moving on from there, on their experience, smarts, and good judgment.

But beyond a certain size, the balance has to shift away from pure entrepreneurship to a more organized form of governance. It’s a transition many entrepreneurs bemoan as the organization becoming a bureaucracy.

But without this transition, employees stop admiring the entrepreneur’s vision and become, instead, leery of their arbitrariness.

The essence of bureaucracy, that is, isn’t sand in the gears of innovation, although that is often an unfortunate side-effect. With attention and care, the worst bureaucracy has to offer can be, to some extent, averted.

What it takes is to constantly remember that the essence of bureaucracy is enforced consistency. It might not be likable, but it’s often essential.

Bob’s sales pitch: I’m always in search of more subscribers. But KJR’s subject matter isn’t the sort of thing I can promote on social media. Or if it is, I haven’t found the magic formula.

The closest I have are subscribers recommending KJR to friends and colleagues who should be subscribers.

I presume the message is clear.

Comments (5)

  • Thank you for clarifying the legitimate role of ‘bureaucracy.’

    And that, when done right, documented, and not used as political/power tool, it serves a useful purpose.

  • Another thoughtful column. Thank you.

    But, I disagree with your point about social media and finding new subscribers.

    Old man, you’re just a little out of touch.

    With permission, hang out in a few IT committee meetings. After listening to the meeting, ask a few questions to find out,

    1. Where do the young IT pros get their info from, and what kind of info are they interested in.

    2. After a few of these market research forays, you should begin to get a sense of who the IT social media influencers are currently, and hire them to advise you.

    Maybe your daughter could point you in the right direction, if she’s still doing computer stuff.

    Just a thought from another Old Man.

    I think what you have to say is valuable and worth the investment to reach out to new potential subscribers as us Boomers age out.

    • I must be even more old and out of touch than you thought: Where are these IT committee meetings of which you speak?

      • LOL! I don’t know what the meetings are called these days, but if there are no opportunities for IT members to meet together, not even on Zoom, I would think that’s real reason for concern.

        Synergy is a real thing, but I don’t see how you get it via email. Covid may have cost us more than I thought.

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