CHAPTER  |  EIGHTEEN

Implementation Requires Controls

Our astronauts on their voyage to the moon were rarely on course. No, it wasn't that we picked poor navigators or that we did not train our astronauts well. But space navigation is immensely complex and the calculations are far from easy. First, both Moon and Earth are moving bodies. That's like taking off from Los Angeles during an earthquake to land in New York, which has lost its connection to the continent and is drifting away while rotating. Fortunately, the gyrations of both Earth and Moon are not random, and astronauts can predict how Los Angeles's gyrations have affected the spacecraft's course as it was thrown into space on takeoff, and where New York City's wanderings would take it by the time of the spacecraft's arrival. However, it's critical that the astronauts know three things about their spacecraft with certainty:¹

1. Where the spacecraft is in space and where it is going
2. Which way it needs to go to stay on or return to the planned path
3. How and when to fire its thrusters to match the planned path

To sum up, they need to know where they are, they need to know where they are going, and they need to have controls that allow them to correct their course during implementation of the flight.

That is, someone needs to take action for the implementation of space flight—or for anything else, for that matter.

Action Is Required

Yes, action is required for implementation. Drucker wrote that the best plan is only a plan, merely good intentions, unless it “degenerates” into work. Of course, his use of the word degenerate was meant to be humorous, since it connotes a less desirable state from previously. He chose the word because he saw that plans often degenerated in the minds of people who have trouble going from planning to action. Aside from the humor, it is absolutely true that without action, nothing is achieved. This is true in space navigation, and it is true in business, marketing, and life.

How many talented professionals have you known who excelled in producing great ideas, but lacked follow-through? As a result, the jobs never got done. They may have even turned the switch on by telling others to begin, but then they just let things run downhill. Their ideas may have begun moving in the direction they were intended, with no updating or oversight. Or, even that might not have happened. The action might have stopped shortly before it was begun.

This happens because no attempt was made to ensure that the initiated actions were carried out to completion. No attempt was made to discover whether everything was working out as intended, whether the future was being shaped as envisioned, or whether the actions should be modified or even changed drastically in order to reach the intended goal.

In failing the critical task of follow-through, the planner wasted the time, effort, and resources of all the work that had been invested. The planner failed to establish and use controls. I doubt many of our astronauts’ voyages would have been successful had they neglected the controls. Even unmanned missions require controls.

Controls: The Key Ingredient for Successful Implementation

As with any project, a great idea needs to be managed. Management requires a breakdown of tasks, assignments as to who is to do what, time schedules, resource allocations, performance expectations, a means of measuring results, periodic and ad hoc reviews, and feedback. To do this, you must have controls. According to Drucker, controls have three major characteristics:²

1. Controls can be neither objective nor neutral.
2. Controls need to focus on results.
3. Controls must consider measurable events, but also those that are not measurable.

Neither Objective nor Neutral Be

No matter how scientific we try to be, when we control something we induce error in measurement. Since we need to measure the effect of an action, this characteristic is of some importance because the very act of establishing the control creates focus and can influence the results.³

The most famous (or infamous) example of the errors that can be induced through controls was a study done at the Hawthorne Works in Cicero, Illinois, beginning about 1924. An experiment was set up to measure productivity improvement with better illumination of the work area. Not surprisingly, it was found that by increasing the wattage of the electric lightbulbs under which the workers performed their duties, productivity increased. All well and good. However, the productivity continued to improve even though the wattage was increased only slightly. Suspicious, the investigators decreased, rather than increased, the wattage of the lightbulbs. Surprise, surprise—productivity still increased! This became known as the Hawthorne effect, identified as such in 1955.

The attention paid to the workers during the experiments is what caused a short-term increase in productivity. The Hawthorne effect has been observed many times, in different settings and environments. The results are still controversial, as they have not always been replicated.⁴ But similar results have been obtained in other experiments.

Controls Must Focus on Results

The major difference between a manager and a leader, according to Drucker, is that the manager focuses on doing things right, while the leader focuses on doing the right things. This is not a simple play on words. Of course, we all like a leader who is both efficient (doing things right) and effective (doing the right things). But if it is a choice between the two, and this determines focus, then the leader must focus on the latter: getting the right job done, whether the job is performed efficiently or not.

In my opinion, this was the great weakness of the Total Quality Management (TQM) movement, even though it had many good attributes, including ownership, continuous improvement, empowerment, and high quality. However, TQM focused on process rather than results. The theory was that if you had the most efficient process in place, the best result would just naturally follow. Unfortunately, as demonstrated by many organizations that adopted TQM, this is not necessarily true.

The Florida Power and Light Company, winner of Japan's Deming Prize for quality management, abandoned TQM owing to worker complaints within a year. The Wallace Company, a Houston oil supplier, won the prestigious Malcolm Baldrige National Quality Award and went bankrupt shortly thereafter.⁵ The control system you use for your implementation must focus on goals and intentions, not just gaining efficiencies along the way.

Measurable and Nonmeasurable Events

Controls are needed for both measurable and nonmeasurable events. Drucker's concern was that measurable events would gradually over-shadow nonmeasurable results, yet the latter are frequently more important. His example of a critical nonmeasurable event, or at least one that is not normally looked at, is the need for an organization to attract and hold able employees.⁶ However, while the need to attract and hold able employees may not be measurable, measurements designed to calculate how an organization is doing in meeting this need can easily be developed. These might measure employee satisfaction, employee turnover rates, time needed to acquire new hires, and so forth.

Control Requires Metrics

The measurements necessary for control are frequently termed “metrics.” Choosing the correct metrics and making the decisions about them are incredibly important in their use for control, in both the day-to-day and the strategic sense. Choice of the wrong metrics, or if their collection is organized or analyzed incorrectly, can lead to a multitude of problems while failing in their purpose of rendering control.

Here's an example of the curious results that can be obtained from measuring the wrong things. A large Air Force command established a management control system and performance measurements were developed for important aspects of the unit's primary mission and support functions. One of the support functions at most U.S. military installations, both then and now, consists of social club–like organizations where members can eat, drink, and play—much like the country clubs and golf clubs used by corporations for this purpose.

All of these clubs are for the benefit of members and their families and guests, and are supported by the members, not by the government. Membership is voluntary, although there is some pressure to participate. The result is that almost everybody joins and pays a modest monthly membership fee. These clubs offer one or more restaurants, a swimming pool, services like check cashing, and usually pool and ping-pong tables, as well as a place where everything from bingo and bridge clubs to parties and weddings could also be held.

Since club membership fees are intentionally kept very low, like many civilian restaurants, a disproportionate amount of income comes from the bars, which tend to ensure profitability for the club. These clubs are not set up to be profit centers, but to serve their members. Usually any profits generated are turned back to the club, and the elected club board makes the decision as to how to distribute these funds to less profitable club activities.

In this one Air Force command, it was decided at the higher level of authority that the basic metric for all the clubs would be profit. One club's profits would be compared with another. The metric was not, however, overall club profit, but profit for each part of the club. For example, the swimming pool never charged fees. The costs for maintenance of the pools, lifeguards, and such were all covered by surplus funds from the bar. The restaurant provided exceptionally good service and high-quality food at low prices. These, too, were enabled due to the profitability of the club bar.

The new management control system, whereby each department of the club had to demonstrate profitability, created immediate problems. The swimming pools had to charge fees for use. Use therefore declined. The restaurants could no longer offer the same quality of food or service. As a result, they were no longer competitive with many nearby civilian restaurants. In desperation and in trying to become profitable, some clubs turned to highly questionable cost-cutting practices. One club ceased purchasing catsup and mustard bottles. Instead, the small government-issue tubes of catsup and mustard, when unused, were salvaged from flight lunch boxes after an aircraft mission. Club members deserted the club restaurants and soon membership declined.

Only when metrics based on service as well as profits were reinstalled did the clubs return to their previous state. The point: You must use the correct metrics and draw the correct conclusions from the data.

Drucker's Nine Control Specifications

There are nine specifications for an effective control.

1. Economical and not unduly costly
2. Important to the intended outcome
3. Appropriate to what is being measured
4. Appropriate to the events being measured
5. Timely
6. Uncomplicated
7. Actionable
8. Reviewable both periodically and on the spur of the moment
9. Accountable for results

Follow these nine specifications as Drucker recommended and proper implementation of your plans is ensured.