Governance by Committee vs Real Leadership

Many organizations have attempted to develop an IT governance framework, largely with the aim of better aligning IT with the business by selecting the major projects and investments for the IT organization. Since I first started seeing this trend, it seemed almost intuitively flawed to me for two main reasons

• The governance framework itself doesn't inherently provide participating business executives with sufficient interest or knowledge to best direct the IT function. The dispersion of responsibility for decision-making across a group inherently reduces individual accountability for outcomes.
• I have a fundamental suspicion of committees as a decision-making tool. My recollection from most organizational behavior research is that committees by and large operate with an effective IQ of the dullest, rather than the brightest, member of the committee.

Now, some might take issue and say that with the right performance measures and incentives, team-level training and selecting the best people, an IT governance committee can provide a reasonable crutch for a CIO unable to really align with the business. I call that making the best of a bad situation.

Eric Monnoyer and Paul Willmott of McKinsey and Company do a better job of articulating the problem of IT governance frameworks and committees by contrasting the approach with the superior alternative of a good IT leader. In a nutshell their article in McKinsey on IT, appropriately titled "What IT Leaders Do." Their article closes with a very clear message for anyone who thinks more and better IT governance alone will improve things:

The difference between companies with strong IT leaders and those that use governance as a substitute for leadership is striking. Executive teams with a strong IT leader make better, faster decisions about technology than do companies that rely solely on a governance system—no matter how effective it is.

The article contrasts the experiences of two major European banks, one with an apparently top-rate IT leader and the other with a CIO that is (in my opinion) ripe for the chopping block and completely out-of-step with the business. While the second bank does have a governance process, it appears impotent at truly aligning IT with the business - "like asking a nation's legislative body to act as a leader. In the end the CIO hijacked the process to push his IT agenda forward."

While Monnoyer and Willmott do not elaborate much further on this specific point - the parallel to political governance is striking and immensely relevant. Consider our system of government with its checks and balances - the legislature defines the law but the executive branch is responsible for discharging or enforcing those legislative acts. A truly recalcitrant executive may not faithfully execute the will of the legislature. For example, Nixon (always a good source of examples for the extensive use of executive power) impounded funds authorized for the EPA by congress - after it had overridden Nixon's veto of the original appropriation.* Even if the CIO mentioned above hadn't hijacked the process to get his way - how likely do you think it is that he would have done the best job possible to execute on the governance committee's decisions had they been in conflict with his own?

Monnoyer and Willmott also identify three additional reasons why leaders are preferable to governance:

Leaders address issues that governance misses

Companies structure their governance systems to decide whether to increase or cut investments in technology. They rarely use these processes to examine the broader questions regarding IT value that leaders routinely confront: what is the role of IT? How do we measure and improve the impact of IT on the business? What innovations should we be exploring? What strategies are our competitors pursuing? And what constitutes best practice?

Leaders accommodate different executive styles; governance doesn't

Some business leaders prepare for IT committee meetings by getting input and advice from their own managers and by reflecting on how they operate in their own domains. Others prefer going over issues and potential options with the CIO. Some executives delegate responsibilities to trusted subordinates; others wish to exert total control by conducting personal reviews after the official IT committee has met and then making a decision. Leaders understand these stylistic differences and accommodate them. In many companies, however, governance is a process that doesn't allow for much flexibility—rules restrict when and how decisions are made, and business leaders are expected to fall into line.

Leaders are accountable

Executives routinely accuse IT of managing projects poorly or of failing to translate business needs into IT solutions. IT, for its part, often blames business for a lack of involvement and quality input. Leaders must be accountable where governance isn't; the buck stops with them.

When one examines all the dimensions of the problem, the best IT business alignment - in both vision and execution - will come from a leader that can individually align himself with the business and lead the IT organization in the right direction. I am not implying it is easy - in fact, it can appear to be a challenge bordering on the insurmountable for some organizations - but it is worth doing. Not only will it have a direct impact on the yield the business derives from its IT investments, but it will also improve the productivity of executives and managers liberated from participation in a cumbersome IT governance process.

* Since Ford's presidency there has been a formal mechanism in place for the president to impound money and request rescission of specific budget items. Trivia buffs may be be interest to know the current president is the only one since Ford not to have used this power.)

Comments

[james governor]

if only we had more leaders. in all walks of life... problem is people want to lead without accountability.

I put forward the idea that IT governance needs an IT boardroom, which I believe might help with alignment conversations and approaches. i wonder if you mind taking five minutes to read my post on the subject, and maybe comment on it?
http://www.redmonk.com/jgovernor/archives/000817.html