2. Diane: Simply put, these controls are ways to fix problems
either before, during or after
something is happening.
Scott: Okay, so you’d more than likely prefer to use the control
that’s implemented
BEFORE something happens, right?
Diane: Ideally, sure, but that isn’t always possible. When you
aren’t able to head
something off at the pass, you’ll be glad to have the other two
controls at your disposal.
Scott: Then, which of the controls is implemented before the
activity?
Diane: A feedforward control is implemented to try to stop a
problem before the problem
happens. If you expand into a different market or start to sell a
new product, any research
done ahead of time can identify supply issues, cultural issues,
logistical issues, or any
number of problems, really, before something becomes an
expensive sinkhole.
Scott: I’d assume too, that by getting out in front of these
problems, you could also avoid
anything that might hurt customer impressions of your company
or product, which could
have a snowball effect, right?
4. most important forms of
control because it happens after a good or service is
experienced by the consumer. Any
response, good or bad, small or large, can result in effective
feedback.
Diane: And then this information can be brought to the attention
of management, who can
assess whether or not the desired quality exists, and if not, can
determine what changes
should be implemented, and when.
Scott: This is why, whenever you go to a fast food place these
days, they ask if you will
call a number on the back of your receipt to give them feedback.
While not everyone will do
it, such a large number of people go to these establishments that
even a small percentage
calling will yield information that is invaluable to a company.
Diane: Looking at these control mechanisms, it is pretty easy to
see that one single control
is not better or more important than the others. They all have a
certain place in the
process, and when done correctly, can have a very positive
effect on a company’s bottom
line.
Scott: Well, sure. In any activity I do, I want to try to minimize
errors in the planning stage
and while I’m doing the activity, and then see what the results
are. That way, should I do
5. the activity again, I can avoid any errors that may have
happened the first time. It’s like a
recipe for a cake. The ingredients and quantities must be precise
and they must be
combined and baked correctly. After eating the cake I can
determine whether or not to
change anything before I make it again!
Diane: That’s exactly it. And now, to distract me from thinking
about eating cake, we’re
going to turn to Will Gordon who works as a manager in process
improvement, project
management, and architecture strategy for information
technology. Will also has his PMP
certification. Welcome to the program, Will.
Will: Thank you
Diane: What kind of controls do you use in your workplace to
ensure a certain standard of
performance is met?
Will: There are several that we use. The most basic and the
most commonly used, of
course, is the performance review. We use pretty much like
most companies do, kind of a
three-step performance review. It starts with establishing a
baseline, any control has to
have a baseline or standard; it has to be measurable. So, we
start out by establishing at
the beginning of the year, measurable goals and objectives. This
would be done with the
7. you have improvement every year. One of those items might
even be like a 360 review
where you have other teams or customers or peers that they are
not only giving feedback
besides your manager on how you actually deliver on an
objective, but from their
perspective, how did you do from a customer service point of
view; some of the softer skills
and whether they felt that you were successful. The 360
feedback, again, can even be
brought into the following year. It can be the standard for a
particular job role or job
function. There are standards out there that we would expect a
certain set of questions or a
certain rating to come back that would set a standard or average
and you can prepare the
employees with that. And then you can also say you would like
to see them improve that in
next year’s goals. You could say we want to see a 10%
improvement or whatever that is.
So, that’s pretty much the most common and what we do to
monitor progress and
performance for employees.
Scott: Thank you so much!
Will: You’re welcome.
Diane: We are all out of time this week, but join us in our next
podcast when we talk about
factors that affect business ethics; specifically, what will help
to determine ethical behavior.
Take care!
9. Diane: Not quite, no! Controlling is about keeping track of and
fixing work performance,
and it is a key weapon in every manager's arsenal. Without
proper controls in place,
determining issues and understanding how to go about fixing
them will be difficult indeed.
Scott: Now, when you say “controls,” do you mean that a
manager needs to be involved in
every single aspect of their employees’ day?
Diane: It doesn't have to be as invasive as it sounds. It just
means having routine
standards in place to check work quality, worker knowledge,
and performance standards.
It's crucial to have controls in place because, let's face it, even
the best laid plans can be
foiled through human error.
Scott: And that's not even to say anything malicious. Just the
fact that we're imperfect
means that having controls in place can catch those things that,
through no fault of
someone's own, might fall through the cracks.
Diane: Exactly. Imagine an ATM that has faulty software. It
gives out $100.00 for every
$20.00 someone tries to withdraw. It is very possible that it
would take a long time for
patrons to alert the bank to the problem, and in the meantime
11. speed.
Diane: And although it might sound simple, there are a lot of
things that go into making this
process work. Take measuring, for example. This is the most
important part of the process
because if you measure an item incorrectly, or measure the
wrong process entirely, then
the rest of the process will be flawed and the results you get
will be next to useless.
Scott: So, measuring is important, and I'd also assume that it's a
pretty varied set of
metrics – observations, oral and written reports, statistics, etc.
Diane: Precisely. And the more hard data backed up with
numbers you can get, the better.
However, not all important metrics are going to be easily
quantifiable, and that's where
more of the subjective, personal observations will come in
handy.
Scott: So, after you have measured the performance, now you
compare it against some
set standard, correct?
Diane: Right you are, Scott! The important part here, of course,
is to not jump the gun. Like
anything performance based, you have to be aware of deviation.
What we are looking for
isn't the standard deviation. We are hoping to find big swings
12. outside of the normal
deviation, because those are the actual problems that need
addressing.
Scott: Which makes perfect sense. So, now that we have looked
at the performance and
compared it to the standard, we can do one of three things:
correct the performance,
correct the standards, or do nothing at all, right?
Diane: Yes, that's exactly it. If there is a problem and it is
noticeable, then things need to
change so that the actions taken are the desired actions. It's
possible, however, that the
performance was much better or much worse than the standard,
and that might mean the
standard itself is to blame. Think about a typical sales job. If
the quota is to sell four
widgets, and everybody is selling 50 widgets, it is more than
likely that the standard is far
too low.
To delve more into the specifics, however, let’s talk to Timothy
Pittman, who works for
Honeywell IT in Continual Service Improvement. Tim, give us
an example of how these
processes play out Honeywell.
Tim: Well, Honeywell has what they call the “Honeywell
Operating System.” It’s based on
management operating systems used around the world. It
developed out of the Deming
14. Scott: Thank you for that insight and all your time today, Tim.
We really appreciate it!
Tim: Thank you!
Scott: And thank you all for sticking around with us. Tune in
again when we talk about feed
forward, concurrent and feedback controls. Until next time!
[End of Audio]