What are the factors that ensure you achieve good governance in a shared services context?

Image courtesy of renjith krishnan at FreeDigitalPhotos.net
Image courtesy of renjith krishnan at FreeDigitalPhotos.net

When you are developing shared services, a collaboration or a partnership one of the questions that will be asked is what impact or influence will I, or my organisation, have on whatever is created? It is not always said out loud, but it is one of the main concerns of anyone moving into a new way of working – the worry that control will be lost – and it can have a major impact on whether the project is a success or not if it is not dealt with effectively. The way in which a project is governed through the development and in the final implementation phase is a significant factor in this, which is why knowing what good governance looks like is so important.

I will use the word collaboration throughout this post to refer to all types of joint working.

The first part of ensuring good governance is to ensure that there are clear messages from the very beginning of the process about how the collaboration will be managed – including how the final governance format will be decided, who will be involved and then how the transition from the existing structures to the new one will be managed.

But this is getting ahead of the subject of this post – which is about what good governance  looks like – as it is important to define this as early as possible to help to allay the fears that can stop people making positive contributions to the success of the collaboration. I will be sharing the experiences from other projects to help you decide what good governance will look like in the context of the collaboration you are working on.

Definitions of good governance

The Audit Commission, in their report on work being done by Doncaster Council in 2010, say:

Good governance is about running things properly. It is the means by which a public authority shows it is making decisions for the good of the people of the area, in a fair, equitable and open way … Without good governance councils will struggle to improve services when they perform poorly. 

This is equally true of collaborations in other sectors. The Cambridge & North Dumfries Community Foundation report Building Successful Collaborations  (which is a guide to collaboration among non-profit agencies and between non-profit agencies and businesses written by  Carolyn Parkinson in Summer 2006) uses a definition of collaboration which includes the importance of a jointly developed structure (or governance model) as:

a mutually beneficial and well-defined relationship entered into by two or more organizations to achieve common goals. The relationship includes a commitment to mutual relationships and goals; a jointly developed structure and shared responsibility; mutual authority and accountability for success; and sharing of resources and rewards.

Good governance in a collaborative context includes the rules and processes which inform effective collective decision-making. The focus should be on collective decision-making done by groups of individuals or organisations rather than one individual making a decision that affects everyone.

In order to ensure the establishment of a good governance structure a range of factors need to be in place, both in the development and implementation phases, and in the final structure that is  established.

1. Common aims

It is important to clearly identify the common problems, aims and issues. This then allows each of the collaborators to apply the appropriate resources from their respective areas of expertise and discipline.  Problems need to be clearly identified so that as wide a range of possible solutions can be developed using the perspectives of all participating groups. It is also important to be very clear about what is not to be included in the collaboration. The benefit is that the collaborators working together are very likely to create solutions they would not have gained working by themselves by focussing on agreed work strands based on the common aims.

It is important to ensure that the words used in describing these common aims are understood by everyone, as misunderstandings in the language used can have a detrimental effect on the trust each partner feels about the final collaboration and the process they are going through. This is best done by developing and agreeing a glossary for the project at the beginning – which is regularly reviewed and added to as each new phase of the project is developed.

2. Power

The location of power has a major impact on the amount of synergy and transformation that can be achieved. In my experience it is may not be the fact that one partner has more power than the others that causes issues – it is the perception of different levels of power and influence that is just as much of a problem. This can lead to partners competing with each other rather than collaborating.

It is important to recognise that all partners have power within a shared services project – one partner might have the power of money, but all partners have the power to exit the process. Knowledge and experience are as valuable as a financial contribution.

3. Trust

Although trust within a collaboration is important – it is also important to ensure that there are not such high levels of trust that there are no challenges when difficult issues are being dealt with. This can lead to complacency and the setting of easy goals which do not achieve the greatest potential benefits.

Trust requires a number of behaviours by partners which include attention being paid to ethics; transparency; accountability; responsiveness and fairness.

Poor communication is a major factor in reducing trust within collaborations. It is particularly important to establish an agreed glossary as each partner will have their own interpretation for many of the terms that will be used to describe the process and the final governance structure. Misunderstandings in the language used will have a detrimental effect on the trust each partner feels about the final collaboration and the process they are going through.

4. Membership structures

The balance of power is closely linked to the membership structures – there is always a balancing act between these two factors. One small change in either area can have a negative effect on the whole project.

The forms of membership  structures chosen for the governance of the development and implementation phases, and for the final entity follow on directly from how the positions in relation to power are handled. One potential way to help to manage the power relationship is for each partner to have equal voting rights, another is for each partner to contribute equally (or proportionately) to the core staff managing the project. There will be other ways it can be handled – but the key factor is that each partner must feel that they are recognised for their contribution to the collaboration if it is going to be successful.

5. Leadership

Effective leadership is required from the initiation of a collaboration to the establishment of the final entity. It must be visible and active at all levels of involvement with the process. This will ensure that the leader of the collaboration project is not undermined by contributors who are actually hindering a project rather than helping it to develop with the collusion of other managers within their organisations.

There needs to be careful handling of the introduction of the initial concept to those who will be involved, especially by the project sponsor and the members of the project board. The tone that they set from the start will help to manage the concerns of those involved in the collaboration project, whether directly or indirectly, as they will feel threatened and defensive because it will have a significant effect on their future working lives. Good communication is key to this, as it is to other factors which contribute to successful governance.

The leader of the collaboration project will need to have a number of skills ranging from nurturing to being strong and forceful to ensure that outcomes are beneficial to the whole collaboration and the majority of its members are achieved.

 

I hope that this brief summary of the factors that influence whether a collaboration project has good governance or not has been helpful. What have your experiences in the governance elements of a project been? I would also be interested to hear about other definitions of good governance that you have found.

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