The business world today is highly competitive, and as your business grows, being able to keep your edge and react to new challenges or threats is essential for long term stability and success. There are many ideas, and buzzwords galore when it comes to management advice, best practices and corporate structure. However when it comes to business, common sense is always the best approach.

Applied governance is, at its core, about applying common sense to business, to deliver consistent outcomes whatever the situation.

1.     We all want our businesses to grow, right?

There are many reasons for implementing a well thought out applied governance methodology, and this is especially true of entrepreneurs who are seeing their business grow beyond their direct control. For SMEs growing pains can be difficult, as you transition from being in complete control yourself, to needing additional management structures, maintaining that agility and ability to react to threats and opportunities can be even more difficult, and it is here that structured governance is essential.

2.     It feels like I’m losing control!

For many entrepreneurs, the introduction of new levels of management can be difficult, and it is often seen as losing control of aspects of the business. However, a successful move to a broader management structure is not just an issue in this way, it also brings in many new problems and questions regarding how the company will be governed overall. This includes how each management component will function with the others, how problems are resolved and how team members interact.

3.     Get creating some future value!

All of this is falls under the concept of applied governance, and as you can probably see, how all of those factors work, does not just affect the management team themselves, but the entire business. A business with a well implemented governance structure is more capable of adopting the right strategies to both retain current value and even MORE crucially, create future value through exploiting opportunities and minimizing threats.

4.     Reduce that risk!

By utilizing the ideas of corporate governance and applying them correctly, not only does the business itself become a stronger, more efficient operation better able to deal with both opportunity and threat alike, but for entrepreneurs journeying from overall control to the shared management necessary for a larger organization, it can be much easier to make the transition through structured, clear governance.

So, there are many benefits to bringing applied governance techniques into an organization, both in terms of the overall business and the management team itself, but as your business grows these changes in structure happen gradually rather than at some arbitrary point, you don’t take on two extra staff and suddenly need a management team.

Like everything else, it grows organically as the business requires, so the question many business owners often ask is where and when do they start to think about their governance structure, and how do you even start to implement such ideas?

Understanding when to implement a governance structure is crucial, and is a subject that really needs its own post to cover everything involved, so we will discuss that next time.