How can you create an effective governance structure for your business alliance?

3 Design your governance framework and mechanisms

Once you have defined your governance objectives and principles, you can design your governance framework and mechanisms, which are the tools and processes that will enable your governance structure to function effectively. Your governance framework should consist of three main elements: the governance levels, the governance bodies, and the governance functions. The governance levels are the layers of authority and decision-making in your alliance, such as the strategic level, the operational level, or the project level. The governance bodies are the groups or committees that represent each level, such as the board of directors, the executive committee, or the project team. The governance functions are the tasks or activities that each body performs, such as setting strategy, allocating resources, monitoring progress, or resolving issues.

Your governance mechanisms are the methods or instruments that you use to implement your governance functions, such as contracts, policies, procedures, metrics, or incentives. You should choose your governance mechanisms based on the nature and complexity of your alliance, and the level of formalization and standardization that you need. You should also balance the use of control mechanisms, which aim to reduce uncertainty and ensure compliance, with coordination mechanisms, which aim to increase collaboration and learning.

4 Implement and evaluate your governance structure

Finally, you need to implement and evaluate your governance structure, and make adjustments as needed. You should communicate your governance structure clearly and consistently to all your alliance partners and stakeholders, and provide training and guidance on how to use it. You should also monitor and measure your governance performance, using indicators such as satisfaction, efficiency, effectiveness, or innovation. You should review your governance structure regularly, and solicit feedback and suggestions from your alliance partners and stakeholders. You should also be prepared to adapt your governance structure to changing circumstances, such as new opportunities, challenges, or risks.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?