Management Control: How It Facilitates Successful Corporate Transformation
To survive and grow, companies are constantly transforming. Whether changes are technological, circumstantial, or even environmental, these projects are used to optimize internal processes and help the company adapt to market changes.
But transformation is almost always challenging. Companies today are looking for flexibility and reactivity, they want to move fast and evolve with the market.
Management control plays an essential role in consultation and advice. It provides an impartial view of whether these changes are worthwhile and impactful, and gives projects the best chance for success. Naturally, I think this is essential.
I’ll explain just what makes management control so critical to businesses, and what to look for in the right controller.
What is management control?
R. N. Anthony defines management control as "the process by which managers ensure that resources are obtained and used, effectively and efficiently, to achieve organizational goals." It’s not the strategic planning process itself, but rather a system to ensure that strategic planning is effective.
Another explanation, from Cleverism: “By establishing a management control system, the business makes it easier to align individual decision making with the larger organizational objectives.” This system ensures that all the decisions throughout a transformation are in line with the company itself.
Which naturally makes it a highly valuable asset.
Management control: a key partner in transformation
When a company decides to rethink its internal processes (digital transformation, organizational transformation, or even transformation of a specific process), management control becomes crucial. Thanks to the controller’s central position in the company, overall knowledge of internal processes, and the relationships between various company departments, they’re integral to the success of the project.
A transformation project is only effective if all relevant departments play their part. But how can they all “sing from the same songbook” when they have their own objectives, needs and characteristics? This is where management control steps in.
The richness of the information produced and the analyzes carried out let it participate daily in the discussions, decisions, and actions of managers. The controller can provide management with all the essential elements for planning. They offer an exact description of the current company procedures and identify the strengths and weaknesses (SWAT analysis) of these processes. They can also support each assumption with precise quantified or benchmark analyzes (comparing the organization with others like it).
Thus, the management controller provides the essential data for the preparation and definition of the transformation project. Throughout its development, they monitor the project by providing impact analyzes and key indicators, and anticipate major discrepancies between the expected result and the actions implemented.
Concretely, this involves regular reports linking costs and quality, and implementation of follow-ups to ensure the project runs smoothly.
But control management also has a role in later stages. While the actions are put in place by the different actors, the controller helps to maintain interaction between them, and ultimately provides analysis of the real impact of the project. It is by defining the key indicators (financial or otherwise) that the management controller can obtain useful impact analyzes.
Clearly, the management controller is a real asset for transformation projects: as the data center for the entire company, the role is not necessarily limited to participation in the project. It is also a pillar for communication.
The new face of management control – a communicator
Through its cross-functional role and its interaction with the entire company, management control is also an essential support for the internal and external communication of the company. The management controller must now have, in addition to analytical skills, real communication ability. Indeed, without communication, management control is invisible; without regular interaction between departments, it cannot carry out its mission correctly.
Over the past few years, the need has arisen for specific communication skills: crafting presentations and setting up regular meetings with the various stakeholders in the company. It’s vital to stay up to date on each department’s development, their needs, and also to align with the overall strategy of the company.
A controller is also an expert in describing processes. We often talk about procedures, process schemes or even manuals/guides (this will depend on the scale and type of transformation), which are so valuable during transformation projects.
So in collaboration with other company experts, the controller helps draft the documents necessary to properly apply the new processes, and ensure good continuity and the transfer of skills in the future.
How to find the right management controller
As in any structuring project, selecting the actors who will manage the transformation project is crucial. You’ll need a cross-functional team, and will likely have to hire the talent to make it up. Of course, this includes the management controller, who should have a few specific attributes.
In addition to analysis skills, the management controller should be able to step back, see the global picture, and identify the key elements of the defined strategy. In other words, the selected controller should be someone capable of relating the strategy to the necessary data / analysis. Each axis of the strategy must be quantified, monitored, and analyzed for optimum project management.
At the same time, the management controller assumes the role of bringing the various actors together, and should therefore present high interpersonal skills. They need to work well with each department: at the start of the project, by obtaining the necessary information to define the strategy and target processes; during the project, when re-orientation is needed if the project deviates from its main objective; or at the end of the project, to communicate and build new internal processes.
Any transformation should be well prepared, followed, and evaluated at each stage of the project to ensure success. The value of involving management control throughout the transformation is indisputable. The profession is evolving, and more and more management controllers are developing project management skills.
Whereas twenty years ago, the management controller remained "cloistered" in front of a screen, today they are called upon to collaborate and exchange constantly with the whole of the company. They’re an advisor, an integrator, and an overseer.