Governance is the framework of rules and practices that governs your business, and how it operates day-to-day.
Governance dictates how you measure performance and reward employees, and also the framework by which your employees and managers make day to day decisions. When you set your business up, you probably spent some time working out your processes, systems and employee policies to ensure everything worked as efficiently as possible, but governance is something that needs regular revisiting if you want your business to keep moving forward.
In a business era where innovation is the key to survival and growth, many businesses try to encourage their employees to be more innovative, and wonder why it doesn’t work. Often, business governance is the reason. For your employees to be motivated to think entrepreneurially, you need to have systems in place that encourage and reward innovation.
Your staff members need to have the flexibility and freedom to be creative. It is not enough to simply tell them to be more creative, they need to have incentives and resources to encourage them to adopt a more innovative attitude.
Although it may be tempting to look at big businesses, particularly technology companies like Microsoft and Apple, and the strategies that have helped them become global giants, it is not realistic for medium sized Australian businesses to employ the same ways of doing things.
Those high profile global businesses behave more like start-ups than multinational conglomerates, and are run as autocracies with a single ruler dictating to employees.
This model is unlikely to work for leaders trying to mature their organisations to take on the next level of growth in the Australian business environment. Australian businesses need to work with employees and encourage them, rather than dictating to them, and develop decision frameworks to empower action within the team. The best way to do this is through governance.
If it has been a while since you looked at your business governance, it may just be the right time for an update. Your employees won’t be able to challenge the ways in which your business is run, and think of new solutions to problems, if there is no space for them to do so.
By rewarding creative thinking, and innovation, you can encourage your employees to become more innovative, and begin to develop a culture of innovation throughout your business.
How innovation friendly is the governance of your organisation? Do you expect your employees to think of new solutions and ways of doing business, without giving them the resources or the freedom they need to do so? By setting up the foundations of your business to encourage and welcome innovative thinking, you can help fuel your organisation’s future growth.