Course Corrections - Chapter 6 The Governance Advantage
- John Ekman
- Aug 26
- 6 min read
When business gets offtrack, a small shift can change everything. Course Corrections delivers sharp insights, strategic advice, and real-world stories from the frontlines of business — helping owners navigate with clarity, confidence, and control.
Chapter Six
The Governance Advantage
Introduction |
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Ask ten people to define governance and you’ll get ten different answers.
Some see it as compliance or rules, others as policy documents, and some as something only large companies worry about. In reality, governance is the backbone of every successful business, regardless of size.
It is the framework that ensures direction, administration, and control
— the three levers that allow a business to perform, adapt, and grow.
Governance Defined: Direction, Administration, Control |
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Direction
Direction is the owner or leader’s ability to steer the business toward outcomes and outputs. It’s about setting a clear destination and ensuring that every part of the business is working toward it.
Direction comes to life through defined and written duties, processes, and expectations.
For example - A duty statement is not just a HR document — it is a suite of direct instruction to staff about their responsibilities, how tasks should be performed, and what outcomes are expected. When direction is clear, staff are aligned, duplication is reduced, and decision-making becomes easier at every level.
Administration
Administration is the organisation of the journey. This is where policies, processes, and procedures sit. Each has a specific role:
Policy – the guiding principle. It states what must be done and why. Example: a workplace health and safety policy.
Process – the step-by-step pathway for how the policy is delivered. Example: the process for incident reporting.
Procedure – the detailed instructions that outline exactly how a task is to be performed. Example: how to fill out and submit an incident report.
Bench-Level Instructions (sometimes called Standard Operating Procedures) – the practical, task-specific guidance that sits directly at the operational level. These are the “how-to” instructions used daily.
When these are documented, accessible, and consistently applied, administration eliminates confusion and variation. It empowers staff to focus on outcomes rather than second-guessing expectations. A Practical Example: Bench-Level Instructions in Practice
Consider a café as an example.
A Bench-Level Instruction (BLI) for cleaning the coffee machine illustrates how governance works at the operational level. The BLI sets out the steps required to maintain this vital piece of equipment, including:
What, How and When each step should be completed — after every shift, at specific times during the day, or as part of a weekly deep clean.
Who is responsible — the rostered barista completes the task.
Who is accountable — the front-of-house team leader ensures it is done correctly and on schedule.
The BLI isn’t just about protecting the machine; it is also a practical tool for managing staff. By clearly defining what needs to be done, when it must be done, and who is responsible:
Staff know exactly what is expected.
Non-conformance becomes visible — skipped steps, out-of-sequence actions, or incorrect timing are easy to identify.
Managers can address issues objectively and fairly.
Non-conformance carries tangible consequences. Equipment may be damaged or fail prematurely, cleaning may be inconsistent, and product quality can suffer. Customers notice, which can reduce trust and confidence in the business. Within the team, repeated non-conformance can create confusion, frustration, or a culture where standards are ignored.
Conversely, consistent adherence to the BLI ensures:
The machine is well-maintained.
Tasks are performed reliably and on time.
Customers see visible standards, which builds trust and loyalty.
In short, a BLI is far more than a simple checklist. It is a governance tool that simultaneously:
Safeguards assets,
Ensures quality outcomes, and
Provides a structured, fair mechanism to manage and support staff.
By embedding such instructions into daily operations, businesses can deliver consistent results while reinforcing a culture of professionalism, accountability, and excellence.
Control
Control is about keeping the business on course. It is not micromanagement. It is the deliberate act of measuring, monitoring, and managing risk. Control means assessing whether policies are being followed, whether processes are producing the desired results, and whether risks are being identified and mitigated. Strong control mechanisms create accountability and confidence — both inside the business and externally with stakeholders, regulators, and customers.
Direction, administration, and control are interconnected:
Without direction, staff drift.
Without administration, effort becomes inconsistent.
Without control, risk grows unchecked.
Together, they form the framework of governance.
Pulling the Levers: Performance and Conformance |
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Within a governance framework, the business has the ability to pull two powerful internal levers: performance and conformance.
Performance is about outcomes. Are policies, processes, and procedures delivering the results they were designed for? Are workflows efficient? Is the business meeting its internal goals? Governance ensures performance is measurable, reviewable, and repeatable.
Conformance is about behaviour and alignment. Are staff following agreed procedures, values, and behaviours? Are they working in accordance with the standards the business has set? Strong conformance reduces confusion, rework, and waste.
A common trap is to focus only on compliance — the external requirements such as tax obligations, workplace health and safety, or industry standards. Compliance is essential, but by itself it does not guarantee a high-performing or well-aligned business. A business can be fully compliant and still suffer from inefficiency, low productivity, and cultural misalignment.
Governance enables leaders to balance performance, conformance, and compliance.
Together, they ensure the business not only meets its obligations but also delivers results, sustains its culture, and creates capacity for growth.
A Practical Example
Take a physiotherapy practice. With no documented procedures, reception staff book patients inconsistently, resulting in double-bookings, missed billing, and frustrated clients. The owner spends hours fixing mistakes instead of focusing on growth.
By introducing governance — duty statements for reception staff, a documented booking procedure, and controls to check billing accuracy — the practice eliminates errors, staff know exactly what to do, and the owner regains time to lead.
This is governance in action: not paperwork for its own sake, but a framework that turns daily chaos into predictable, reliable outcomes.
Governance, Leadership, and Culture |
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Governance doesn’t just improve systems — it strengthens leadership and culture. When governance is visible:
Staff know what is expected of them and why.
Leadership is seen as consistent, accountable, and fair.
Confidence grows across the team because rules are applied equally.
Culture thrives when people know the standards and see leaders upholding them.
In contrast, without governance, businesses drift into inconsistency, double standards, and a culture of uncertainty.
Growing Governance: From Ad Hoc to Optimised |
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Governance doesn’t have to arrive all at once. Businesses develop it in stages:
Ad hoc – tasks are undocumented, reliant on memory or individuals.
Defined – basic policies and procedures are written down.
Embedded – processes are consistently followed and reviewed.
Optimised – governance drives continuous improvement and enables innovation.
Most small businesses begin in the “ad hoc” stage. Moving even one step forward creates measurable benefits — less confusion, fewer mistakes, and stronger accountability.
Over time, progressing toward “optimised” allows the business to scale confidently.
Governance as the Gateway to Improvement |
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Once governance is established, it unlocks the ability to embed and sustain broader improvement strategies.
Take Lean Six Sigma as an example (see Chapter 4 of Course Corrections for the skinny on that!).
At its core, Lean Six Sigma is about eliminating waste, reducing errors, and improving process flow. But for it to succeed, the business must already have:
Defined processes to measure and analyse.
Consistent procedures that can be adjusted and improved.
A culture of accountability to sustain changes.
Without governance, Lean Six Sigma often stalls. Without policies and processes, there is nothing solid to measure or refine. Without control, improvements disappear as quickly as they are introduced. Governance provides the structure that ensures Lean Six Sigma delivers long-term results rather than short-term gains.
The same applies to other initiatives such as:
Quality improvement programs – require policies and procedures to define and measure quality.
Strategic growth initiatives – require direction and administration to align resources with priorities.
Risk management frameworks – require clear controls to be effective.
Cultural change programs – require conformance structures to ensure behaviours are embedded.
Governance is not bureaucracy.
It is the enabler that allows these strategies to be executed effectively.
Why Governance Matters for Every Business |
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Some businesses avoid governance because they see it as unnecessary “red tape” or something only large organisations need. In reality, governance gives back time, capacity, and confidence.
It ensures:
Staff know exactly what is expected of them.
Processes are consistent and outcomes are reliable.
Risks are managed before they become problems.
Leaders are free to focus on growth and strategy rather than day-to-day firefighting.
The absence of governance results in duplication, inefficiency, miscommunication, and missed opportunities.
The presence of governance creates a resilient business that can scale, improve, and adapt to change.
The Bottom Line |
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Governance is the framework that makes businesses work.
It is direction, administration, and control applied consistently. It allows leaders to pull the levers of performance and conformance. And it is the foundation that enables improvement strategies like Lean Six Sigma to succeed.
If you’re still running your business on memory, guesswork, or verbal instructions, you’re not in control — the business is controlling you. Governance changes that.
At Lost Digits, we help businesses build governance frameworks that unlock growth, reduce risk, and create structure and capacity.
Reach out for a free 20-minute consult - let's get the ball rolling - let's see how we can help.
📞 0417 448 998
Till next time, cheers!
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