Governing versus managing

In one paragraph

Governing is deciding where the business is going and holding it to account. Managing is running it day to day. In a small business one person does both, and the urgent one always wins.

Governing sets direction, approves the plan, monitors performance against it, manages risk, and holds management to account. It is periodic, deliberate and forward-looking.

Managing allocates the work, solves today's problems, serves the customer and runs the operation. It is continuous, reactive and immediate.

Why it collapses in a small business

There is no board, so the owner is both. Managing has deadlines and people waiting; governing has neither. So the governing simply does not happen, and the business runs perfectly well while going nowhere in particular.

This is the same failure as [the achiever matrix]'s quadrant two, seen from the top of the organisation.

How to actually use it

• Put a governing session in the diary — quarterly, half a day, out of the office, with the numbers in front of you. It is the only way it happens.
• Ask of any task: is this deciding where we go, or is it running what we do? Doing them in the same hour means the governing loses.

Where it breaks down

• The separation is cleaner in theory than in an owner-managed firm, where the same person genuinely holds both roles and cannot fully split them.

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