Management Control for Performance in a New Era: Why successful leaders rethink their approach to corporate leadership through state-of-the-art performance management tools

Managerial Control for a New Era Why successful leaders rethink their approach to corporate leadership through state-of-the- art performance management tools S P H E R E Advisors AG | Untermüli 7, Postfach 4440 l CH-6304 Zug (ZG), Switzerland l T: +41 41 758 08 17 F: +41 44 683 15 96 l contact@sphereadvisors.com

It is a new era – and time to fundamentally rethink traditional control! • Today, employees make thousands of decisions Results every day. Culture • For this, an enabling culture is needed. Systems • Higher dynamics, complexity, uncertainties, and ambiguities are the norm. This demands a new set of managerial systems Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 2

Think about the following How many decisions to you make every day at work ? How many decisions do all your employees make per day? Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 4

It is likely a pretty large number … 1000, 10‟000, … we are talking about a lot of decisions. Some of them are - unconscious, - routine, - mission critical, - once in a life-time, or - unimportant decisions. Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 5

Imagine Everybody in your organization made the right decision at all levels all the time Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 6

If so, why don’t we pay more attention to how we make decisions in organizations? At scale? In a different context? At distance? Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 8

As modern products are decisions, we need to spend the same amount of time on decision design as we do with traditional, physical product design! Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 9

It is a new era Today, most employees are employed for their insights, knowledge and skills. Not for their physical labor! Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 11

They make (e.g. manufacture) decisions! Some are bigger ones than others … Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 12

Modern employees want to … Understand Create Contribute Achieve Do right Hurdles and Lack of Lack of Conflicting Lack of purpose Temptations barriers information opportunities; requirements; everywhere fear from risk lack of resources What we are Information is Leaders make Employees Leaders … and control used to … the top decision execute motivate for what is getting performance done Where as Unlimited Unlimited Limited Increasing Growing today‟s information opportunities; attention; limited pressures temptations employees incentives to resources find… take risks … and need Feedback where Employees Clear priorities Sense of Empowerment; the work is make decisions purpose clear norms being done Hence, modern Diagnostics Direction Actions Beliefs Boundaries managerial Informed Focuses What gets done How things get What is inside controls are decisions attention done and outside the required limits Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 13

The implications for leadership are far reaching! Modern leaders … • Ask questions and focus • Shape the environment • Support creativity • Establish relationships As compared to: -Motivate and decide -Tell people what to do -Judge and review -Sit on top, provide instructions -Are responsible -Have the power to change -Set the rules Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 14

But, traditional control prevails … “When we lose control, we install more of it” “When things get blurred, we ask for more detail, more precision” “With rising uncertainty, we revert back to making decisions ourselves”. “With increasing ambiguities, we establish more rules and limit the boundaries”. Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 15

The challenges of the new era … Higher dynamics are the norm Complexity increases with size Uncertainties challenge the strategy Ambiguities require room to move Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 19

Vision Goals Mission The organizational response to increasing dynamics are managerial controls that focuses attention … rather than “checks on people”! Strategy Metrics Values Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 21

Performance Planning The organizational response to increasing complexity are decomposed management processes Total Risk designed for Profiling diagnostic leadership. Measurement MbO Strategic Planning Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 23

The only way to deal with uncertainties is to trust your own capabilities. Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 24

Risk dialogue The organizational response to uncertainties are managerial communications practices. Delegate and trust. This means, Strategic interactive dialogue leadership rather than to decide yourself. Sense making Performance conversation Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 25

When the future is unclear, then principles for decisions perform better than standard operating procedures. Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 26

Performance Management The organizational response to increasing ambiguities are managerial principles. They need to be shared, Strategic and embedded Management in the culture. Governance Incentive People Policy Systems Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 27

Modern managerial systems need design! “The energy of people to systematically beat the System is rather high!” “If you only have a hammer, every problem looks like a nail“. A.H. Maslow Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 28

Systems provide a shared way of doing things • Routines – common way of doing things • Replicability – hit the ground running as you expand • Predictability – know what you‟re going to get • Reliability - Confidence that you are going to get it Which means that they can reduce • Transaction costs • Friction • Management effort Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 29

Aligning Systems with Culture to deliver Results! Results • Good decisions drive performance • An enabling culture is needed • Managerial systems need to be designed to enable good decision making Decisions Culture Systems Systems that do not fit the organization create bureaucracy, hamper performance, limit growth and make leaders ineffective! As such, leaders focus on the wrong things, spend time on unimportant issues and waste their energy. Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 30

SPHERE Corporate Diagnostics For a review of your managerial practices The diagnostic measures 20 factors to review corporate Results results – the results of good managerial practices Decisions Culture Systems The diagnostic reviews 20 The diagnostic reviews 50 elements of how managerial features of corporate controls, systems are used throughout processes, practices, and the organization – the way policies – the quality of the things get done tools Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 31

The SPHERE Diagnostic Scorecard helps leaders understand how culture and systems drive performance Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 32

The SPHERE Diagnostic Toolbox helps leaders focus, align and integrate managerial systems to support the corporate agenda For most organizations, the re-design of managerial systems is an infrequent and non-routine task. It is too risky to be left with staff that do this once in their life. It should be left with those experts that make this their daily job. Contact us for your re-design Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 33

SPHERE Advice on Corporate Systems Unique experience and expertise in dealing with sensitive, critical and potentially risky projects 5 Systems 5 Diagnostics 5 Design Options 5 Steps Analysis Direction 2 Definition 3 1 Diagnosis Boundaries Diagnostics Beliefs Design 4 Implementation 5 Action Results Leadership Cycle Leadership Models Tool Box Scorecard Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 34

Publications: Tools for Effective Leadership All our articles can be downloaded from our website: www.spherediagnostics.com © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 35

Join us on our web 2 platforms: SPHERE Advisors: Coaching www.sphereadvisors.com and advice for CEO and the Management Team SPHERE Diagnostics: www.spherediagnostics.com Services for Staff Leaders and Publications, resources, forum, blog Control Professionals Presentations for download, free Diagnostic trial Group: Peak Performance in Corporate Leadership http://www.linkedin.com/groups?gid=1884954 Copyright © 2002 – 2009 S P H– 2009 Advisors R E |Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com Copyright © 2002 E R E S P H E AG All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 36

Peak Performance at the Top We support CEOs and Senior Executive deliver peak performance in corporate leadership Advice: CEO Coaching, Senior Executive Workshops Diagnostics: Corporate and individual effectiveness Communications: Stakeholder, content and impact management Infrastructure: Board relations, management systems, CEO Office Our client list reads like the „Who„s Who“ of the leadership of firms, non-profit organizations in Europe, the U.S. and the Middle East. Trust is the foundation of our business. This is why you do not find names here. Contact us for peak performance S P H E R E Advisors AG Tel: +41 41 758 08 17 Untermüli 7, 4440 Postfach Fax: +41 44 683 15 96 CH-6340 Zug (ZG) contact@sphereadvisors.com Switzerland www.sphereadvisors.com Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com

Management Control for Performance in a New Era: Why successful leaders rethink their approach to corporate leadership through state-of-the-art performance management tools

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