So far, our Virtual Enablement series has explored topics ranging from designing a system of work to creating outcome-based portfolios. Read the first four parts in the series here.
In this article, we turn our focus to how organisations can align their governance structures to iterative work and develop a lean, efficient control environment that allows safe operation without compromising on the ability to move quickly.
Iterative planning and funding
To align funding mechanisms with the process of outcome-based portfolios, quarterly objectives are prioritised – and funding allocated accordingly – as a function of the value each outcome creates for stakeholders.
This funding is allocated to stable teams for iterations of work based on the capacity needed in order to deliver on each respective outcome. While some additional resource can be allocated between these teams according to changes in requirements and funding, a stable team working on an enduring outcome should be at the core of the value stream.
Principles of iterative planning and funding
- Outcome/results driven: Planning is based on Objectives and Key Results (OKRs) and achieving these through minimum viable solutions that contribute to long-lived value streams and strategic objectives.
- Ownership for results and value delivery: Every component of work, from strategic ambition to the team’s day-to-day activity, has defined owners who establish the expected outcomes and validate the results.
- Continuous monitoring and prioritisation: Key roles within the value streams are empowered to monitor value delivery and manage changes in priorities, based on customer demand and market events. This ensures that the teams are always focused on the highest-priority work and changes to the plan are managed transparently.
- Funding ‘sticky and stable’ teams, not projects: Funding is provided to ‘sticky and stable’ teams based on the cost of running those teams and the type of outcomes each team can achieve. As organisations mature, they will be able to have a forward-looking roadmap of what the business needs are for the ‘team of teams’ and adjust capacity and resourcing accordingly.
Lean governance, risk, and controls
Leadership teams’ tendencies to hold on to decision-making authority is often justified from the perspective of managing risk. However, the organisational cost of doing so is typically ignored.
All too often, teams are held back from making progress by governance and risk structures that haven’t adapted to ways of working. As a leadership team, investing in leaner processes is easy but delegating decision-making rights is much harder.
Lean governance certainly doesn’t mean removing risk and controls altogether, but it does mean agreeing on a risk profile which matches the speed at which your organisation chooses to operate.
In practice this broadly means that those close to the work should make decisions about action, while decisions about direction should be more centralised. Both sets of decisions should be made with just enough insights and data, and with customer outcomes at the forefront.
Principles for effective and efficient risk and controls
- Minimum Viable Compliance (MVC): Effective control environments understand risk and focus on mitigation where it matters. For risky changes apply more compliance, and vice versa.
- Don’t do it all at once: Improve your control environment over time, focusing first on where you can have the greatest impact in reducing risk while assisting delivery.
- Understand different types of risk: e. legal, information security, product, etc. Take a ‘risk is everyone’s job’ approach by embedding mitigation guardrails into your teams and your delivery model.
- Automate where possible: Many standard risk mitigations can be automated to provide continuous compliance, rather than validation after the fact.
- Be clear on the non-negotiables: Set the organisation’s risk profile and define how each outcome fits into this. Set Minimum Viable Compliance requirements as non-negotiables.
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Jane Fitzgerald, Partner, Enterprise Agility Lead
Jane is a Partner in our Operations Transformation portfolio, specialising in operating model transformation. Jane is passionate about helping organisations optimise the way they deliver on their purpose, and has assisted a variety of local clients in transforming their operating models to improve customer experience and foster business growth. Jane views agility, lean, and human-centred design as critical tools to help organisations thrive in new ways of working.
Riley Cahill, Analyst, Enterprise Agility
Riley is an Analyst in the Enterprise Agility and Operations Transformation portfolios, with experience supporting the delivery of agile transformations across a variety of sectors. With a background in finance, Riley specialises in the alignment of funding to adaptable outcomes.