Mastering the management processes – The Management Control Cycle
Despite huge efforts to improve operational processes over the past 20 years, critically important management processes are left at the discretion of individual managers, who are expected to define them themselves. Without consistent management practices, an organisation will evolve sub-optimal methods for making and executing decisions in operational processes like sales, finance and operations. Often, this results in an increased number of meetings that onerously consolidate information for upward consumption, with little useful direction or feedback in return.
Perversely, more meetings often weaken the speed and quality of decision-making, and therefore operational process performance. As more ad-hoc meetings are called in reaction to problems, decisions are no longer taken at the right level in the organisation. Executives call all-hands gatherings to understand the underlying issues and take quick action. In doing so, they are likely to instigate decisions for which they lack the required expertise. Conversely, people with the right expertise will feel demoted and will duck their responsibilities by systematically delegating decisions upward.
Ad-hoc meetings are also inefficient. Without proper structure, they produce decisions of inferior quality. Meeting notes are unlikely to be captured, causing a loss of the decisions’ rationale and eliminating a mean to hold people accountable for agreed actions in subsequent meetings.
Few firms or leaders anticipate emerging complexity and new management requirements, to put the right management control processes in place and avoid the upward delegation trap. This is precisely what a management control cycle (MCC) brings, through a precisely designed hierarchy of meetings with clearly understood frequencies, structured agendas and carefully selected attendees. During MCC meetings, issues are discussed by those closest to them, with the skills, competence and authority to make the right decisions. KPIs supporting the meetings allow participants to quickly spot issues, identify problem root causes, and timely implement fixes.
A Management Control Cycle is built on three principles. First, meetings have a scope such that attendees are accountable for all items discussed and resulting actions are logically allocated. Second, the MCC allows escalation of decisions only for justified exceptions, when remedial actions are not delivering the expected results. Third, the MCC’s rhythm of regular follow-up prevents issues from festering or going undetected. Meetings on operational issues are the most frequent. Quick feedback loops validate actions and demonstrate control on issues before they need to be escalated.
Management Control Cycles are often set-up with three distinct layers, each with a remit of increasing scope. In this way, the mid-level MCC acts as a buffer between operationally driven meetings involving front-line managers and strategically oriented meetings involving executives. Adding more layers slows down decision-making, while reducing to two levels risks micro-management and excessive escalation.
Putting efficient management processes in place is not easy. In the absence of established standards, managers will typically resist change. Yet, best practice management processes exist in each function, and they are best implemented with a bottom-up approach, combining agreed procedures, KPIs, templates and rituals to shift management behaviour. For those organisations ready to rise to the challenge, and transform their management processes, the MCC is a powerful lever to shift performance and anchor one of the last sustainable competitive advantages: the ability to collectively execute and move fast.