Your governance framework is probably costing you twice. Once in the budget you allocated to implement it, and again in the competitive opportunities you’re missing while teams navigate it. Often the most comprehensive frameworks fail because they optimize for coverage instead of business outcomes.

The alternative is strategic governance. But first, there’s a critical prerequisite.

Address Root Causes First

In my first essay on governance, I showed how most frameworks fail by adding rules instead of fixing root causes. They create expensive theater that hides problems rather than solving them.

Most governance problems are organizational: unclear ownership, inconsistent processes, absent definitions. Addressing these first turns governance from cost center into strategic enabler.

The sequence matters. Clarify who owns what. Establish real accountability. Resolve conflicts driving workarounds. Then this framework helps you determine what standardization amplifies those fixes rather than burying them.

Three Pillars, Not Twelve Workstreams

Start With What's Non-Negotiable

Begin with compliance requirements: GDPR, NIS2, HIPAA, CSRD, Data Act and the EU AI Act, sector-specific regulations, and critical security standards that apply to your operations.

Here's what most organizations miss: compliance done right forms your governance foundation. GDPR controls become trust enablers. AI Act transparency becomes explainability infrastructure. Security standards become reliability guarantees enabling business use cases.

Build these properly because everything else sits on top. Poor compliance implementation becomes technical debt. Well-designed compliance becomes infrastructure enabling innovation. This is your non-discretionary baseline. Budget it properly because cutting corners constrain every future initiative.

Primary decision criteria for the first pillar? Is it required by regulation, law, or critical standard? If yes, build it well. If no, it doesn't belong here.

Address What Your Organization Specifically Needs

Most frameworks assume every organization needs identical structures. Your decisions must reflect your specific business model, risk profile, and operations. What creates genuine friction? Where does absence of standards prevent collaboration or create unacceptable risk?

Example: A multinational couldn't deliver consistent customer experiences because each business unit maintained separate customer records. They needed shared tooling, a data catalog and common customer models. Not because best practices recommend it, but because customers interacting across units expected the company to recognize them.

Another organization had teams building AI models in isolation, reinventing solutions. They needed a lightweight repository to discover existing work, reducing duplication and enabling reuse.

The critical word is "required." Can you articulate exactly why your organization needs this? Point to the friction it eliminates? If not, you're adding bureaucracy. This is where governance ROI becomes measurable, each element should eliminate specific friction costing time or money. If your team can't quantify what problem it solves, don't add it.

Focus on What Enables Strategic Value

Finally, connect governance to competitive advantage. What standardization unlocks your ability to scale data and AI value? Start with strategic questions: Where do data and AI create competitive advantage? What capabilities must you build to execute strategy? Where does your business model require coordination to work at scale?

Then ask: what governance enables those capabilities?

If strategy requires scaling AI across markets, you need standardized development practices. Not because standardization on itself is a good thing, but because you can't scale without consistency. If you want customers to see the same product information online, in-store, and across markets, you need product master data management to standardize product definitions, attributes, and hierarchies.

These aren't arbitrary standards. They're enablers for specific business outcomes you've committed to achieving. Standardization serves strategy execution.

This category is dynamic. Strategy evolves. What you standardized three years ago may not matter now. When strategy changes, governance here should change too. If this doesn't change when your strategy changes, your governance is disconnected from business priorities. You're governing yesterday's strategy, not today's competitive reality.

Why These Distinctions Matter

Understanding these three categories changes how you evaluate every governance proposal. Compliance requirements are driven by external obligations: you build what regulators and laws require. Organization-specific needs are driven by your context: you address friction specific to how your business operates. Business value drivers are driven by your strategy: you standardize what enables competitive advantage.

When someone proposes new governance, ask: which category does this serve? That single question eliminates most unnecessary bureaucracy before it gets built.

The goal isn’t perfect coverage. It’s sufficient governance to meet obligations and enable strategy. Everything else is overhead creating competitive disadvantage.

In my next essay, I’ll show exactly what changes when you apply this framework.