For many of today’s leaders, the biggest challenge isn’t getting access to timely information. In fact, there’s often too much of it finding its way to our desks. The real problem can be plowing through reams of data to find those kernels of information that matter. Then there’s the task of analyzing it in a way that actually helps make informed decisions. Meet control charts.
To most of us, the whole subject of data analysis and business processes is like a deep dive into the abyss. However, control reports, or charts, are designed to help us swim through the murky waters. I still recall those long road trips, using giant unfolded maps that half-obscured the driver’s view, struggling to pinpoint where we were and where we were going. Missing an exit was catastrophic, so if you could read a map, you were road-trip royalty. Then GPS technology took away the need to read maps and simply told you what you really cared about, where and when to turn.
Just as GPS revolutionized navigation, control reports overhaul and streamline management reports to highlight the variables, events, and probes that which most requires our attention.
What do control reports do?
Simply put, control reports help managers maintain control of business processes by tracking their performance metrics. Their basic function is to highlight the difference between acceptable variation in outputs and those that signal something has gone wrong. As we might expect, some variation is due to chance or ‘noise’—you really can’t do much about it. But some variations are red flags that needs to be investigated and addressed immediately. Did quality fall below standard due to normal fluctuations in input materials or equipment maintenance? Or was there a serious problem with a supplier, or a major miscommunication on the line that can be identified and eliminated in the future?
Control reports are popular in manufacturing, but they can be applied to any process that’s measurable and can be tracked in time. W. Edwards Deming, a pioneer on the subject and author of Out of the Crisis, showed that the same principles can be applied in knowledge-driven, professional businesses. Think back-office operations or call centres.
Just as manufacturing processes differ, so do the variables in their control charts. However, control charts all offer similar benefits, which include:
- providing a common language for analyzing process performance
- reducing the need for inspection
- creating and communicating a baseline from past trends
- forecasting future performance if the process is in control
- predicting the impact of any changes on future performance.
It’s about the big picture
In advocating for the greater use of control reports, Deming’s focus was always on the big picture. He recognized that people naturally default to fixing problems at the expense of longer-term goals. He also understood that a culture of fear causes reactive behaviour and cutting corners, which stifles creative solutions. Control reporting moves the focus from the myriad of data that measures the magnitude and incidence of problems to information that can find and fix problems.
Since Deming’s original work in control reporting, the plethora of data available to leaders has grown exponentially, making the task of defining which performance indicator is truly “key” a challenging one. That being said, the tools available to decipher and present the data have also improved. Business intelligence now benefits from the use of visual dashboards, such as Tableau or Power BI, giving us technology overlays to simplify large amounts of data. That means both the science of control reports and their presentation can make the job of managing outputs a bit easier. All it requires is the effort to embrace them.
Implications for leaders
A well-crafted control report can uncover the info that demands immediate attention. But the goal isn’t just relieving managers of operational annoyances. It’s about freeing us up to do what they were hired to do—working with your teams to provide leadership and coaching, giving guidance on priorities and rewarding positive results rather than setting off alarm bells around misunderstood outcomes and variances.
Of course, the advent of control reports isn’t a simple windfall to managers either. Designing control charts draws on experience and input from senior staff, not just in identifying variables and setting limits, but in aligning with the Key Performance Indicators (KPIs) of the organization. How are quality, timeliness and customer satisfaction incorporated into the features of our products, as well as the standards around them? Getting these answers right requires a leader to collaborate as a colleague, not a judge; but make no mistake—leadership on control reporting needs to start from the top.
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Adam W. Silver is the Managing Director of the Performance Acceleration practice at Farber. The Performance Acceleration practice helps executives and boards overcome operational and strategic challenges to uncover potential and unleash performance. Adam can be reached at 416.496.3734 and firstname.lastname@example.org.