Business Control Process – Are You Out of Control?
Business control process includes four elements: Standards, Measurement System, Measurement, and Adjustment. Let’s go through each element.
Standards - In relationship to control process in business, standards must be set. Standards are the core of everything that happens in business, and… must be measurable. Let me explain. When you don’t set standards, you have no idea how well you are doing. Your business control process will be flawed.
Standards are defined as “the lowest acceptable productivity or the lowest acceptable results”.
Example: In school the grading system was A, B, C, D, F. The lowest acceptable result was a D. F is considered to be below standard. Same thing applies when you set your standards to attendance, sick time, how often your place of work will be vacuumed (if it is a store), etc. you get my point.
Your substandard performers should be eliminated.
Measurement System - How will you measure your organization. What system will you put in place in order to measure the standard? In many organizations, the acceptable measurement system is QQCT. Quantity, Quality, Cost, and Time. Develop a relevant measurement system.
Example: In one position I showed up at the office about 2 hours after my employees came in. I didn’t want them to take advantage of the fact that I show up later than them and won’t be there in the morning. I asked them to send me an email message from their office computer every morning letting me know that they’re in. I set up a system by which I can measure whether they come on time.
Measurement - This is the actual measuring stage in the control process. It is not enough to say, “Oh, we need to produce 100 pairs of shoes per day”. You have to measure that quantity every day to see if you are within your standard. Primary sources of information are records, observations, and interviews.
Adjustment - Take action based on your measurements. If you set your shoe production standard to 100 shoes per day, and see that your people produce 109 pairs of shoes per day, your standard of 100 is too low. Adjust it. Likewise if you barely able to produce 89-91 pairs of shoes, you know you set your standards too high. Adjust those. Make your goals reachable, then strive for more.
This is a logical business control process which is fair and helps the company and its employees stay on track achieving its goals.
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For more information on Control, check the following pages:
Go to Substandard Performance Page
Go to the Heisenberg Principle Page