stratified governance model v9.1 summary

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  1. 1. Copyright Alkamind Consulting Alkamind Confidential 1 Stratified Governance Model Alf Rock 1-416-574-5330 alf@alkamind.com Alkamind ConsultingAlkamind Consulting
  2. 2. Copyright Alkamind Consulting Alkamind Confidential 2 A core theme within the Stratified Governance Model is the evolution in organization where both Action and Thinking needs to be synchronized at ever level of the organization. The legacy of industrial age processes is that the thinking of workflow was separate from those performing the work. alf@Alkamind.com order edge-of-order edge-of-chaos environmental complexity Governance Layer 1 - Operational Governance Layer 2 - Management Adaptations to products and delivery mechanisms responded to conditions. Changes to social & market place conditions offered up new opportunities. Rigid production line processes form to build and distribute value. Marketing & sales campaigns persuade a culture of consumerism. order edge-of-order edge-of-chaos environmental complexity
  3. 3. Copyright Alkamind Consulting Alkamind Confidential 3 This industrial age control loop is effective in establishing rigid order and controls around business processes. The challenge is in the time frames it take to execute, and its ability to sense and quickly adapt its hardwired operational model. alf@Alkamind.com order edge-of-order edge-of-chaos environmental complexity Governance Layer 1 - Operational Governance Layer 2 - Management Respond Sense React Succeed order edge-of-order edge-of-chaos environmental complexity
  4. 4. Copyright Alkamind Consulting Alkamind Confidential 4 Control Process Driven Measure Success Driven People Orientated Environmentally Viable Integrate Create Order Improve Process Integrate People The accelerated rate of change of the 21st century will naturally select the organizations able to quickly integrate the multiple organizational systems into a viable entity within its economic ecosystem. There is a natural sequence and self- awareness to the maturation of an organization.
  5. 5. Copyright Alkamind Consulting Alkamind Confidential 5 Executive Layer purposeful Management Layer goal-seeking Operational Layer state-maintaining The multiple organizational systems in play are the executive, management, and operational layers. From a systems thinking perspective, these systems pursue purposeful, seek goal, and maintain a steady state. Control Process Driven Measure Success Driven People Orientated Environmentally Viable Integrate Create Order Improve Process Integrate People
  6. 6. Copyright Alkamind Consulting Alkamind Confidential 6 alf@Alkamind.com order edge-of-order edge-of-chaos environmental complexity order edge-of-order edge-of-chaos environmental complexity Governance Layer 1 - Operational Governance Layer 2 - Management Co-emergence of needs for more complex control objective. As more chaotic conditions emerge the system moves towards breakdown. A systemic design set new forms of control objectives with feedback. The double loop feedback controls allows the entire system to continuously learn and set direction. The evolution of our Governance environment is calling forth a greater need to engage in Risk-Adjusted control methods aligned to comply to an ever evolving set of standards and regulations.
  7. 7. Copyright Alkamind Consulting Alkamind Confidential 7 alf@Alkamind.com order edge-of-order edge-of-chaos environmental complexity order edge-of-order edge-of-chaos environmental complexity A Stratified Governance Model allows the organization to develop and design controls and monitoring points between the executive, management and operational layers of a firm. This governance structure provides a continues learning mechanism, where quality, risk and compliance is integrated into the governance framework rather than reviewed separately. order edge-of-order edge-of-chaos environmental complexity
  8. 8. Copyright Alkamind Consulting Alkamind Confidential 8 Governance monitoring relies on a set of control feedback loops between the hierarchical layers of an organization. Making the linkage between the process & practice (operational) layer up to the higher (management and executive) layers is based on control feedback loops. Input Output as Outcomes Output as Control Metrics Metrics Process Activities & Procedures Tasks, Tools Information records Alkamind Consulting alf@alkamind.com User of Service Service Support Service Delivery Tools & Metrics Service Management Tools Business Application Systems The outcomes of processes include: Delivering a product Providing a service that: provide a Design provide an Implementation provide ongoing Operations provide Improvements Financial properties including: Revenue Operational Costs Monitoring of Control Objectives include : Summary of metrics of product delivery Correlation of metrics of service provisioning Financial summary for accounting of: Metrics: financial , risk, fiduciary & prudential Operational efficiencies
  9. 9. Copyright Alkamind Consulting Alkamind Confidential 9 There is a fundamental difference between a Control Process and the underlying Value Creation Process. While the Value Creation Processes form the core components of a Business Model, the Control Processes provide the Risk-Based management framework for long term viability & sustainability. Input Output as Outcomes Output as Control Metrics Metrics Value Creation Process Activities & Procedures Tasks, Tools Information records Control Process Functions 1. Set Control Objectives 2. Establish Sensors & Monitors 3. Feedback Mechanism 4. Compare Function 5. Respond Feedback Loop Control Loop Alkamind Consulting alf@alkamind.com User of Service Service Support Service Delivery Tools & Metrics Service Management Tools Business Application Systems Input of Resources Value Creation
  10. 10. Copyright Alkamind Consulting Alkamind Confidential 10 Control Process Functions 1. Set Control Objectives 2. Establish Sensors & Monitors 3. Feedback Mechanism 4. Compare Function 5. Respond 4/5. Compare & Respond function reviews the feedback metrics against control objectives and takes action based on the feedback While the business Value Creation Processes are concerned with using resources to create value in the form of products and services, the Control Processes are a risk-based management function that provides oversight to making decisions & setting direction (governance), managing risk, and comply to regulatory obligations. Control Loop Alkamind Consulting alf@alkamind.com User of Service Service Support Service Delivery Tools & Metrics Service Management Tools Business Application Systems Input of Resources Value Creation 1. The Control Objectives need to satisfy specific Regulatory (or Standards) Requirements 2. Sensors & Monitors needs to be established in the appropriate Service Management domains (e.g. Strategy, Design, Transition, Operations, Improvement) 3. Feedback Mechanism generates the associated evidence of compliance to the review functions of Compare/Respond, Audit, or Certify Feedback Loop
  11. 11. Copyright Alkamind Consulting Alkamind Confidential 11 Break The layers and control-feedback loops
  12. 12. Copyright Alkamind Consulting Alkamind Confidential 12 The single control feedback loop maintains a state where the control objects of a process are measured against the operational feedback monitor. Input Output as Outcomes Output as Control Metrics Metrics Process Activities & Procedures Tasks, Tools Information records Governance Layer 1 are we on target to achieve our control object goals Coordinate Direct Monitor Control Feedback Loop Control Loop Alkamind Consulting alf@alkamind.com User of Service Service Support Service Delivery Tools & Metrics Service Management Tools Business Application Systems
  13. 13. Copyright Alkamind Consulting Alkamind Confidential 13 The internal process of the Governance Layer 1 is a comparison of results from the feedback process (monitor) and the control objects (CO) goals. Governance Layer 1 are we on target to achieve our control object goals Coordinate Direct Monitor Control Input Output as Outcomes Output as Control Metrics Metrics Process Activities & Procedures Tasks, Tools Information records User of Service Service Support Service Delivery Tools & Metrics Service Management Tools
  14. 14. Copyright Alkamind Consulting Alkamind Confidential 14 This process of Governance Layer 1 is to take the norms of the control objectives and compare the monitored feedback against those norms. This single control feedback loop aligns the outcomes to the target goals. Governance Layer 1 are we on target to achieve our control object goals Coordinate Direct Monitor Control Monitor Compare Norms are set as the control objectives as Governance oversight of operational processes Norm Single Feedback Loop Control Loop Control
  15. 15. Copyright Alkamind Consulting Alkamind Confidential 15 The Governance Layer 2 uses a double control feedback loop as a form of organizational learning to cross correlate metrics and refine the goals that should be set. The primary function of GL2 is to set the right controls for GL1. Governance Layer 2 are we aiming at the right goals? Coordinate Design Plan Improve Monitor Compare Are we doing things well? Norm Double Feedback Loop Control Loop Control Are we doing things the right way?
  16. 16. Copyright Alkamind Consulting Alkamind Confidential 16 The Governance Layer 3 uses a triple control feedback loop as a form of learning to integrate the diversity of portfolios and programs to strategic goals to create value. The primary function of GL3 is to integrate diversity into a GL2 control set. Governance Layer 3 are we integrating diverse perspectives? Coordinate Strate