I have sometimes heard teams complain that governance is getting in the way of their progress. Usually this is because of out-of-date governance or a misunderstanding by the teams as to what governance is telling them. Anything out of date has the potential to negatively impact progress. This is not just true of governance. We have a phrase for it: “technical debt.” So, let us set that aside and instead talk about what governance can do for innovation. By doing so, we begin to address the misunderstandings that cause some people to see governance as a competitor to innovation.
First, governance provides a safety net for an organization. If an effort conflicts with governance and the governance is correct, then the issue is with the effort. That means that somewhere down the line, if an effort does not come in-line with governance, it is going to be a failure. Governance tells us where we should not go. That also means the organization has a checkpoint to help identify which innovation efforts are worth pursuing and which ones are not. If an effort cannot be brought into compliance without a lot of extra work, it is probably not worth the investment to pursue. Therefore, governance helps us determine what we should focus on.
Second, efforts to meet governance requirements may foster changes in other areas of the organization. For instance, if we develop a system that is capable of processing transactions significantly faster than before, then it is likely we will have to improve on the ability to audit those transactions. Perhaps evaluation of the transactions gets built into the overall solution because it is simply too fast for humans to keep up without something paring down the data. Once this type of ability is developed in the system, it very well could be ported to other systems where efforts are still being done manually. This frees up key personnel resources to work on other things.
Governance can also show us what the organization needs to work on as we come to better understand the intent of the governance. If there are certain controls around a particular set of operations, then that tells us there is value in those operations. If there are a lot of controls, that tells us that the value is likely higher than some area of the organization where the controls are significantly less. This tells an innovation team to look at that set of operations because an innovation breakthrough there may have a significantly greater impact on the organization than one in another area.
These are just some of the reasons that governance is not a competitor for innovation but rather a supporter. The reality, though, is that this is a conversation we will need to keep having. Sometimes the conversation will lead us to outdated governance. And sometimes it leads an innovation team to an effort that produces real value. Therefore, it is important for us to explain how governance can help.
Editor’s note: For further insights on this topic, read K. Brian Kelley’s recent Journal article, “Innovation Governance: Governance for Better Innovation,” ISACA Journal, volume 4, 2020.
