The business 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 businesses 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. 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. 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 minimising threats.
4. Reduce that risk!
By utilising the ideas of corporate governance and applying them correctly; the business becomes a stronger, more efficient operation. It is better able to deal with both opportunities and threats alike. However, for entrepreneurs journeying from overall control to the shared management necessary for a larger organisation, it can be much easier to make the transition through structured, clear governance.
Next steps
So, there are many benefits to bringing applied governance techniques into an organization. These are both in terms of the overall business and the management team itself. 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.
Read our other governance blogs:
The 3 things you need for implementing governance and leadership