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What Comes First – Governance or Culture?


We’ve been doing this work for many years and thought we had heard just about every possible question related to strategy and strategy execution, until, that is, we got this query at a recent event: “When you develop a Balanced Scorecard, what’s more important, putting in a governance system or ingraining it in the culture?” For those of you who don’t have a Balanced Scorecard, it could be any type of new system — OKR, the 4 Disciplines of Execution, anything. Out of the gate, do you focus on creating a governance system or attempt to make it part of your cultural landscape? Obviously, for any new execution system to demonstrate results over the long haul, both of these conditions are necessary. However, we do feel there is a logical order: First comes governance, then follows culture.

Let’s assume your organization has adopted OKR, and it’s the first time you’ve instituted the framework. Job one will be convincing people (executives, managers, and employees alike) to actually use the system. We’ve both witnessed companies that create outstanding OKR programs that hold the potential to provide tremendous value, but literally wither on the vine from lack of use. Human nature is such that folks will always gravitate toward the status quo, which in this case translates to ignoring the new system hoping it will go away. Therefore, you need to institute systems and processes to lay a solid foundation for your new OKR program.

The best way to do this is to make it easy for people to use the tool. Change is most likely to happen when it represents the path of least resistance. There’s a reason that even as we age, many of our closest friends are those we grew up with; they lived close by, making interactions easy. When it comes to a new OKR program (for example), we can make things easier by scheduling regular review meetings in advance, and making them sacrosanct on calendars. A software system can be used to collect data, eliminating the time-consuming and cumbersome effort required by manual collection. Also, someone can be elected to facilitate initial review meetings, setting the agenda, teeing up questions, documenting action items, and so on. By putting in place a few simple rules that make it easy for people to use the system, the probability of uptake is enhanced significantly.

As you launch any type of change initiative, ask yourself these questions:

  1. Is the purpose of the change clear?
    For employees to accept any change they must first fully understand why you’re undertaking it in the first place. Be sure to ceaselessly communicate the rationale of your change before going into launch mode.
  2. Have we made it easy for people to use the new system?
    People are stubborn in their refusal to change, so have them literally trip over the new tool with rules and processes that facilitate initial use.
  3. How can we make this new framework part of our culture?
    Cultural change doesn’t come quickly. However, that doesn’t preclude you from thinking of and testing ways you might insert the new system into your culture.

As your implementation matures, you can segue to ingraining the new program into the cultural fabric of your organization. Cultures are slow to change and evolve, but there are things you can do to accelerate the process. For example, rename the system to something that is more culturally relevant to your organization, one that befits your reason for engaging with the framework. The simple act of naming something tends to personalize it, replacing sterile corporate-speak with a meaningful and aspirational moniker. If you hope to achieve moonshot-type results with your new change program, start with governance and cultural change will follow.

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