Control

Effective processes implies that the need for control diminishes
Chapter 4
p.7
Is it true that if effective processes are in place in the company, the need for control diminishes?
If internal processes are well-established, the results potential of the company is correspondingly high. Effective processes have two major effects on the way the company and its people function:
People know what to do, when to do it and how to do it.
They are enabled by having access to the information needed to perform their jobs.
By introducing effective processes, employees know who is responsible for what. This contributes to better relations in the workplace.
With effective flow of correct information; the right vision and actions follows. Therefore having a greater potential for results in a team and company:
Thank you to: Jobau Gray for the graphic presentation
If strong processes are in place, employees in the company know who must do what by when. This results in efficiency and order within the company, which obviously impacts positively on the results potential of the company.
If everybody shares the same vision, purpose and values, the need for control is drastically diminished, without compromising the high results potential of the company.
On the other hand, if processes are not in place, employees won’t know exactly when to do what. This can lead to weak relationships, confusion,
a high need for control and, inevitably, a low results potential for the company.

Effective processes implies that the need for control diminishes

Chapter 4 p.7

w&t_question

I Ask

Is it true that if effective processes are in place in the company, the need for control diminishes?

w&t_exclamation

I Answer

If internal processes are well-established, the results potential of the company is correspondingly high. Effective processes have two major effects on the way the company and its people function:

  1. People know what to do, when to do it and how to do it. They are enabled by having access to the information needed to perform their jobs.
  2. By introducing effective processes, employees know who is responsible for what. This contributes to better relations in the workplace.

With effective flow of correct information; the right vision and actions follows. Therefore having a greater potential for results in a team and company:

w&t_ch4_f_process_vs_control

Thank you to: Jobau Gray for the graphic presentation

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I Explain

If strong processes are in place, employees in the company know who must do what by when. This results in efficiency and order within the company, which obviously impacts positively on the results potential of the company.

If everybody shares the same vision, purpose and values, the need for control is drastically diminished, without compromising the high results potential of the company.

On the other hand, if processes are not in place, employees won’t know exactly when to do what. This can lead to weak relationships, confusion, a high need for control and, inevitably, a low results potential for the company.

four levers of control

Four levers of control

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Simons Four Levers of Control

In this article you will find a question and answer style explanation of the four levers of control.

levers of control

Ask

I often hear people say that the company is on track. How do they know that? What mechanisms exist that guide the company, its people and its business to stay on track?

levers of control

Answer

As a fast growing company in an ever-changing environment your company focuses on the effective utilization of , as  R.Simons from Harvard Business School calls it, the four levers of control.

Within the company, mechanisms exist to ensure that four things happen effectively:

  1. Obtaining commitment to the purpose of the company
  2. Staking out the territory
  3. Getting the job done
  4. Positioning for tomorrow

For each aspect there is a lever of control to ensure it Stays On Track.

This diagram identifies the four levers of control and gives you a Holistic view of the dynamics of controlling strategy:

levers of control

Levers of control

simons levers of control

Ask

I can see that we are dealing with four sets of systems – the four levers – that work together to ensure that the business strategy stays on track. I recognise some of the terms, but can’t you give me practical examples that will enable me to get a better picture of what the Four Levels of Control consist of in our company.

simons levers of control

Explain

See the link with the symbols and the culture of the company? Remember the balance scorecard?

It’s a very useful diagnostic control system…and do you realise that the key result areas process is also a diagnostic control system for individual performance and career management.

Lets explore the What, Why and How of the four levers of control in the company:

LEVER 1: Belief systems

What:

Explicit sets of belief that define basic values, purpose and direction; including

Why:

To provide momentum and guidance to opportunity

  • Mission statements
  • Vision statements
  • Credos
  • Statements of purpose

LEVER 2: Boundary system

What:

Formally stated rules, limits and prescriptions tied to defined sanctions and credible threat to punishment

Why:

To allow individual creativity within defined limits of freedom

  • Codes of business conduct
  • Strategic planning systems
  • Asset acquisition systems
  • Operational systems

LEVER 3: Diagnostic control system

What:

Feedback systems that monitor organisational outcomes and correct deviations from preset standards of performance like:

Why:

  • To allow effective resource allocation
  • To define goals

How:

  • Set standards
  • Measure outputs
  • Link incentives to goal achievement

LEVER 4: Interactive control system

What:

Those systems that team player skills use to advance and develop.

Why:

  • To focus organisational attention on strategic uncertainties
  • To provoke the emergence of new initiatives and strategies
  • To ensure that the way we do business relates very closely to the changes in customer needs

How:

By ensuring that:

  • Information regarding changes in technologies, customer requirements, supplier strategy, competitors strategies and team skills are adequately and proactively incorporated into the strategy process
  • The chosen strategy remains appropriate to the business reality and overall company objectives
4 levels of control

Advise

Much of the How of Lever 4 is achieved over a cup of coffee through interaction during team discussions, and through listening to your customer…

Try some active listening and productive questioning techniques on your customer, you’ll be amazed at what you learn!

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