Introduction to governance and the importance of trust

The organization of power and responsibilities in companies influences how they operate. Whether you are a dove (fan of delegation) or a hawk (adept at control), how do you find the right balance?

At the beginning of the 21st century, we are going through a period of societal upheaval that is pushing citizens, especially in Europe, to seek more meaning in the professional and entrepreneurial projects in which they are involved.

If governance is indeed a set of best practices (and behaviors), aimed at structuring power and responsibilities at the top of the organization, how and how could it contribute to meeting these new challenges?

Today, we are talking about experience. This includes the emotional engagement created during the interaction, whether internally with employees or externally with customers and third parties.

Numerous articles and statistical studies highlight a level of disengaged presenteeism among employees.

According to Gallup, 27% of employees are engaged, 59% are not, and 14% are “actively disengaged.”

It's a bit as if, in this legendary race that opposes Oxford to Cambridge every year, one of the teammates was rowing the wrong way!

What “path” must top management take to transform the organization and mobilize the energy and intelligence of all at the service of the project, to build an efficient and attractive organization for internal-external third parties?

Governance challenges in the era of the fourth industrial revolution

The underlying technologies of the fourth industrial revolution (Klaus Schwab, Founder and President of the World Economic Forum) are changing the way businesses manage and organize themselves.

The challenges concern the difficulty in understanding the deluge of available information and the speed of innovation-disruption. The company and its governance must demonstrate their ability to learn and evolve...

Klaus Schwab explains that businesses will need to move from a hierarchical structure to connected and collaborative models.

The motivation would be more internalized, driven by the common desire of employees and managers to achieve better control and more independence and meaning together...

The “Opale” model: a new path for organizations

Frédéric Laloux, (author of the book Reinventing Organizations) opens up astonishing perspectives and shows that every time mankind has entered a new era of development, it has invented new organizational models.

A new model would be emerging that would bring meaning, enthusiasm and authenticity. This model, which he calls “Opal,” is based on a new metaphor: businesses as living organisms.

It would take over from an Orange model in which the objective is to beat competitors, to make growth and profit and entrusts management with the role of decision, verification of what and choice of how.

According to this “Opal” model, organizations would evolve around three axes:

• Self-governance

Relationships are “peer-to-peer”, outside of any hierarchy and without seeking consensus.

• Self-assertiveness (“wholeness”)

A set of practices with all that we are, in the fullness of our humanity.

• The Evolutionary raison d'être

Businesses that have a life of their own and an awareness of the Direction in which they are involved.

Case studies: businesses that have adopted new governance practices

The last few decades have brought us numerous examples of structures that have disrupted their governance and organization for their greatest benefit. We can only be seduced!

Some of these businesses that changed their practices very early on include:

• GORE (US under the leadership of Bill GORE) has adopted and lives by strong principles/values: freedom, equity, commitment, waterline. These values structure the governance and operation of the company.

• FAVI (under the impetus of Jean François ZOBRIST) has abandoned an Executive Committee and meetings in favor of a very broad subsidiarity to field teams in an economy of trust.

• SOL (Finland under the leadership of Liisa Joronen) favoured a free environment, autonomous, self-directed teams, free to decide while ensuring the exemplarity of the owner and management family.

Is it a fashion, a trend among others or a paradigm shift that will permanently influence the governance of organizations?

Implement governance inspired by trust and autonomy

The adjustment or implementation of governance within an organization or a project undoubtedly deserves more than conviction. In particular, common sense and pragmatism will make it possible to involve the various actors (shareholders, managers, etc.).

At the end of this process, the solutions implemented will take into account in particular:

• The current and desired DNA of the actors (alignment, authenticity representing one of the keys to success);

• The business model and the conditions for its success that we are trying to achieve;

• The customer and employee experience, which is so important in a digital economy;

• The necessary subsidiarity that allows decision-making at the lowest possible level;

• The evolution of vertical organizations to horizontal organizations, whenever possible;

• The need for a clear and relevant framework for the exercise of power and decisions;

Defining and implementing governance appears to be one of the structuring responsibilities of managers and shareholders. They will be able to rely on qualified third parties to enable them to conduct more holistic or systemic thinking.

VISCONTI coaches are regularly asked to discuss these questions with their clients.

The establishment of governance, depending on whether it is an evolution or a disruption, deserves support because it is a process of change, with its share of hazards...

And let's remember, to succeed, you need 5% strategy and 95% implementation!

To go further you can read our full article on operational excellence