on governance
the journal of Michael Werneburg
twenty-seven years and one million words
In the past, in dealing with internal audit, I often wondered at the perceived value-add of the function. It mostly just came across as "rule following for its own sake". But in building governance into the firm I'm currently helping grow, I've learned that there really is more going on under the hood. It's not all about yet another management reporting function, or layering on cover-your-ass bureaucracy. Here are some of the direct benefits I've seen:
1. Eliminating surprises. Once people start working to a plan, it's amazing how so many of the blow-ups disappear.
2. Guiding day-to-day decisions. There suddenly comes a time, in an environment that's organized itself, when staff are making predictable decisions rather than running to their management for decisions. This is enormous.
3. Building consensus. The initial period of building in governance tends to piss everyone off because it exposes a lot of differences in expectations and assumptions and interpretations. But once that period is past, the elimination of those differences can be very powerful. This spans not only the organization but its dealings with providers and clients as well.
4. Continuous improvement. It sounds like meaningless consultant talk, but once people understand the aims of an organization's activities, they suddenly grasp how the activities themselves can be improved. I'm very encouraged by what I've seen from everyone who's now living the processes to which I've given life.
5. Selling our services. It cannot be overstated how much our governance retrofit has improved our ability to sell to our clients. They're all big financial monsters and heavily regulated. They live and die by their ability to stay ahead of risk. As the president put it some time ago, "The level of conversation we have now with prospects is completely different."
In short, we've floated the entire boat. It weren't easy, but we've revolutionized the place.