This document discusses the relationship between governance, development, innovation and regulation for companies. It argues that governance alone is not sufficient for companies to continually regenerate themselves in the face of changing environments. Development, defined as entrepreneurship, is also needed to cause the necessary value-targeted behaviors. Bringing together development and governance can help assure competencies are mature enough to be effective, consistent and stable, while also supporting corporate adaptability. This coordination of development and governance enables business continuity despite environmental changes.

1. Development, Adaptability
and Governance
Repositioning Innovation and Regulation

2. Business talk must always admit that (with very rare exceptions) almost no kind of business
requires a particular company, and that a given company may be in different businesses from
time to time. The two things – business and company -- can be connected or disconnected.
We commonly talk about companies that are born-n-bred business organizations in terms of
the distinctiveness of what they produce, of how they produce it, and of who cares.
That triumvirate of value, competency and stakeholders allows us to keep the essential
narrative about a business easily in mind as we dwell, however lightly or heavily, on whether
the company “really matters”.

3. Typically, the idea that a company matters will also have a simple multi-factor template to use.
The company is looked at in terms of what kind of impact it has on its operational environment,
why it has that impact, and why it tries to do so.
In short, the factors of “what matters” about a company are role, purpose, and intention.
Put bluntly, if we think that a company matters in a good way, we’ll be supportive. And if we
think it matters in a bad way, we will want it to go away or want it to change.
All of that sets up the framework in which it makes sense to talk about what companies think
they should be doing.

4. The whole point of the company is to cause “practical” things to happen in an orderly way that
otherwise will not happen by themselves, or will happen in an “un-orderly” way.
Nearly all popular business literature now focuses on a few gigantic headlines characterizing
the current practical difficulty of the operational environment:
• Cross-cultural workforce
• Globalization
• Multiple generations
• The digital infrastructure
• Automation
• Security
• Radical competition
• Market redefinition
• New types of assets and transactions
In turn, the key issues posed for the company are about the desire versus the fact of:
• How things are used
• Where things are used
• When things are used

5. Any organization that “uses” something to “cause” something else must obviously be seen as
an “actor” or an “agency” of some kind.
We certainly understand the essential meanings of those terms: an actor does something
hands-on, while an agency facilitates the realization of something.
That perspective helps us to lock in on the idea of a company’s “practical behavior” as a major
point of reference.
What the company cares about the most is a sustained ability to conduct its role as an actor
and/or agency.
What it worries about the most is risks (including threats) to sustaining that ability.
Dramatic journalists, writing frankly, call it “survival”. From a management standpoint, without
the specter of carnage, the objective is to persist.

6. One of the key issues to address about that persistence is the collection and coordination of
influences on the company that come from outside of the company and from inside of it.
The external and internal influences must be compatible in order to sustain the company’s
active role. They affect what can be used, how it can be used, and why it is used.
Today, the complexity and variety of those influences is greater than ever before. This
challenges the company to understand and exercise an ability to continually regenerate itself
in the face of discontinuities and uncertainty in its operational environment.
In popular parlance, the urgency for being adaptive means there is an overall constant tension
between innovation and regulation.

7. Transformers

8. The single most useful perspective on continual regeneration is from within the general term
Development. How do we know this?
Intuitively, we know that regeneration means something is developing that will restore an
important necessary state. But there’s more… and, different.
It’s easy to rely on governance as the attentiveness triggering that response. Normally, we see
governance as a practice dedicated to preserving the feasibility and propriety of action within a
set of intentions, consistent with stakeholder objectives based on a current-state environment.
However, in the current era of rapid, intensive and relentless change, company regeneration
has an equal or greater priority that is not solved by governance.
The practicality that is an essential justification of a company’s existence is easily seen as a
forensic description of its behavior, primarily based on three observations:
• Why (Motive): comes from exploration and learning
• What (Opportunity): comes from position and invention
• How (Means): comes from resources and capabilities

9. Environmental factors that are malleable, volatile, ephemeral, evolutionary, or otherwise
discontinuous in any way can change any one or more of the why/what/how factors that a
company currently maintains in coordination.
When a change is inevitable, company regeneration must occur to an extent that restores
potency of conduct in a role of current and imminent relevance.
Thus we must think of corporate development. The strategic shape-shifting of an organization
occurs with a very significant respect of governance, where governance is expected to declare
environmental constraints that can be successfully accounted for as organizational
commitments. But in corporate development it is also always true that new organizational
forms may come with constraints that are unprecedented for the company.
Consequently, corporate development is instrumental to strategies for regenerating the
company as an actor and/or agency. Meanwhile, converting strategy to operations means
creating the practices that are both governable and immediately relevant to impending or
projected future states.

10. The key idea emerging here is that governance does not “cause” the behavior that is necessary
for the company to continue to matter in its environment as a producer of beneficial value.
And, the issue of causality is fundamental to the purpose of having a company instead of just a
network of associates.
Therefore, under pressure of continual regeneration, the practice that is dedicated to the
causality of the necessary value-targeted behavior should be recognized as a form of
something already having that definition: development.
The difference between development and governance is not as simple as innovation versus
regulation. The interesting move now is to recognize some nuances of meaning and apply them
usefully and consistently.

11. Coordinating and expanding
Innovation & Regulation

12. Development is highly scalable and does not belong exclusively to any level or department of a
corporate structure. In other words, the development function is an enterprise-class function.
Enterprise Development is not a common term in the most popular business journalism. But
for our purposes, the precedent of course is “enterprise governance”. As does governance,
development manifests in different ways within different contexts, but always for the same
intention.
Meanwhile, a conventional research of the idea shows that while the popular business press
has not taken up the term with much enthusiasm, the term already has a substantial pedigree
and clear meaning that is only becoming more important and relevant at the scope of an
individual company. The most common established meaning of Enterprise Development is
entrepreneurship.
Enterprise Development is a more direct and urgent reference to the critical success factors of a
company adapting in the typical current environment of constant change.

13. In this case, we observe that development and governance are each necessary while neither
alone is sufficient.
The question is whether the “necessity” leaves them parallel or requires that they intersect…
When argued to bundle development and governance together, there are at least two
important justifications to highlight.
One objective of having both governance and development is to assure that the competencies
selected and exercised in operations provide enough support for behavioral maturity. In other
words, the competencies are:
• effective enough to address requirements,
• consistent enough to propagate reliably,
• and stable enough to repeat while avoiding rigidity

14. Another objective will be to support corporate adaptability.
Numerous factors play a major role in entrepreneurship, affecting the effort at any scale. While
the conventional “entrepreneurial” perspective for a business is to consider investment
economy from a financial point of view, the appropriate point of view for a company
(organization) is behavioral – a consideration of the way that the company co-operates,
internally and externally, with the culture that it both uses and affects:
• Ecology
• Strategy
• Policy
Corporate adaptability (not merely innovation) coordinates with Competency maturity (not
merely regulation) so that each is more likely to achieve its aims.
By extension, the combination of support for adaptability and maturity enables business
continuity in the face of change.

15. Business Continuity
Corporate Adaptability Maturity of Competencies
GovernanceDevelopment
Environmental Change
Success factors:
• Ecology
• Strategy
• Policy
Success factors
• Effectiveness, for requirements
• Consistency, for reliability
• Stability, for repetition
Co-operative causality Feasible propriety

16. ©2015 Malcolm Ryder / Archestra Research
www.archestra.com
mryder@malcolmryder.com