To have a successful transformation, is governance important?

Several studies define it as a critical success factor. Among them we have found:

• Wang and Chen (2006) studied the impact that governance had on the success of ERP (Enterprise Resource Planning) implementation projects.
• Morris (2011) “… saw an increase in a recognition of the importance of governance on projects.”
• Müller and Martinsuo (2015) researched the role of a project’s governance model in the relationship between the buyer and seller of an ERP (Enterprise Resource Planning) and the joint success of the implementation.
• Joslin and Müller (2016) studied the relationship between a project’s governance and its success.

In a Company, governance has to do with the institutional stability and strength (power) that create conditions favorable to managing an administration and for that administration to make effective decisions.

The success of any organizational transformation project requires defining a clear-cut, simple and effective system of governance. It should have sufficient power to motivate all internal audiences at all levels, especially the management levels, to accept the responsibility for the implications generated by the changes that result from transformation projects.

A committed leader does not delegate the task of putting together the governance bodies for a transformation project. When selecting the members of a project’s steering committee, people with sufficient power and influence to lead the transformation process successfully should be taken into account. The people assigned to this committee should receive rewards or sanctions in line with or commensurate with the final results.

The following is a comment that comes from one of the readers of our previous blog: Who should lead an organizational transformation?that deals with committed leadership (top management), “The sustainability of an organizational transformation is not the responsibility of the departments in particular. It does however correspond to the balance of the objectives of each one and it is the head who has to watch over that balance; for example, considering the profitable, the social, and the environmental aspects.” The leader of a transformation should consolidate a governance model that fairly represents all the areas involved in the change for them to accompany him and help make the success and sustainability of the defined Change Vision possible.

Governance becomes a determining factor in every organizational transformation because without clearly established governance the decision-making processes can become slow. This is due to the fact that in many cases decisions take more time than is allotted and this really slows down the transformation causing financial costs to overrun and also generating emotional costs for the people living the changes.