Formula of control optimization and how to put it into practice

Every entrepreneur is first of all a human, and thus unique and having its own development path. Some want to control business and deal with symptoms appearing afterwards, some want to control everything going deeper into the operation part of business and not knowing how to escape this vicious circle. And in the midst, there is a balance that needs to be achieved. So, this is the subject of today’s article — how to find harmony in control.

What is business control and why do we need it

It would be appropriate to first deal with notions and definitions. And let’s begin with the main one — the process of control.

Control is a scope of actions that help businesses achieve goals by comparing actual work indicators with planned ones, analyzing deviations, and making decisions based on the results of the analysis (setting new plans and goals). All processes and results of the company’s work must be controlled.

Let’s distinguish the main components of the control: preplanned indicators (standards, instructions, measures), comparison, deviations analysis, decisions taking regarding deviations.

Control system is implemented in the business process with a particular purpose, which is to secure confidential information and increase the productivity of the whole team in order to maintain the company’s welfare. It will lead to the appearance of new working places and salary growth. But not every control is for good. Only a balanced control system will help to convert the business into a functional system capable of predictable growth. Control can be applied to processes, people, means, and resources.

Process control makes sense when implementation is standardized and there is a clear instruction for a particular type of work. For example, to optimize attack formation there used to be a process of recharge and musket shot that would take 40 seconds and was split into eight small steps. The process is thus split into components, standardized, main control points are established (where something can go wrong), interaction points with the client within the process are outlined, and so on.

Human control is interrelated with the actions they perform. The control should be applied to such indicators as the degree of work interest, sticking to timetables, maintaining the company’s culture and team’s ethic.

Means and resources are presented by devices, finances, and time. The last component is usually underestimated, though it is the main factor.

Problems entrepreneurs face

I suggest proceeding to discuss problems emerging in the process of business development, as the resolution of such problems typically requires optimization of all components of business control. And let’s look at several main ones, such as:

Sales downfall

The root of this issue is that an entrepreneur frequently does not understand what, to whom, and how he wants to sell. And only after answering these questions, it’s becoming possible to establish business strategy and business plan that is the basis of all.

Low team effectiveness

There is an important rule: if you want to ensure the quality of the result — ensure the quality of the process. This means that if you want to build an effective team, you need to:

• Understand what key responsibility centers must exist in your company;
• Have a clear understanding of how they should function;
• Rebuild the work of each center and outline the exact results being expected.

Company stagnation

In fact, it’s a really serious problem, as the key target and the indicator of a company’s health is constant growth and development.

Excessive business dependence on the entrepreneur

While trying to control and go into all the processes in the company, an entrepreneur often destroys his company. As he is not a controlled person, but is allowed to change everything in the company, being not always well-structured and consistent in his actions. In addition, an entrepreneur is usually inclined to focus many processes on himself, thus making workers have no desire to seek autonomy and responsibility as a boss can always back them. And also it’s dangerous when an entrepreneur starts intervening in the process he is not familiar with. In such a situation, similar actions can lead to devastating results for the whole production process.

Lack of finances

It is frequently the result of a cash gap in a company when it cannot pay the bills. In order to prevent such situations, each corporation must have effective accountancy with three key reports: balance, P&L, and Cashflow. Moreover, it’s crucial to implement financial planning.

While trying to see everything, an entrepreneur, as a rule, sees nothing. Such hyper control can fail to lead to a positive result, as there are a lot of components and processes in every business, that are impossible to deal with alone. Here we face the question of business process’ specificities and control points that entrepreneurs must distinguish themselves. The main focus must be a final result and the solution of narrow problem situations, while interim control is the responsibility of managers or separate units’ directors, a long story short — components of a global process.

A particular formula can thus be applied to every member of a business process aiming to optimize the processes of control and management.

— What you need to see. Which instruments will help you see what you need to see;

— What you can see and can ignore. What you can reject. For example: if you are an entrepreneur, you don’t need to see all internal processes, it’s redundant;

— What you shouldn’t see. What processes lie beyond your area of responsibility and mustn’t fall under direct control.

And this can be applied to any stage and any member of a working flow, not only to an entrepreneur but also to a manager and common worker.

Using this formula, we come to an understanding of the volume of control that is sufficient for everyone to feel comfortable and stay effective at work.

Based on this, individual “sufficient” instruments of operational management and control are formed.

Nevertheless, we should remember that there is no singular magic pill. I am showing you direction, dropping a hint, which lays in answering three questions. And if the answer is frank and rational, it will give a key to building a working system.

And it’s not a matter of choosing a specific instrument. The majority make the mistake to think that first, they must choose the instrument of control, and then everything will be self-controlled. But it’s wrong. We need to decide what is to be controlled and how.

And based on it, we can establish our own “case of instruments” that will provide practical answers to these three questions.