Using systems controls to boost productivity

Using Systems Controls to Boost Productivity

Systems controls can help the manager spot productivity problems and maintain work-flow efficiency. The control process consists of five

integrated steps.

Leonard R. Sayles

Introduction

M o s t managers mistake targets for controls. For them, exercising control is making sure standards and output levels are attained and maintained. There is nothing wrong with this-in fact, it has to be done. But such “controls” do little to spot sources of productivity ineffectiveness, and they may actively encourage employees to do things that superficially seem desirable in the short run but destroy real organizational effectiveness and productivity in the longer run.

Only controls designed on the basis of work- flow systems and employing basic systems concepts lead the manager and his or her subordinates to empha- size the kinds of efforts that contribute to coordination and overall organizational effectiveness, Furthermore,

0 1982 by Leonard Sayles

only these kinds of controls serve to counter the tend- ency of performance targets (and of incentives, bud- gets, and the like) to encourage suboptimization: meeting job standards in ways that help the incumbent at the expense of the larger organization and its effectiveness.

Thus, managers must learn to use performance targets and systems controls. The former surely can serve to motivate subordinates, but only the latter can tell the manager how the organizational system is functioning as a work system and where his or her intervention is necessary.

After all, the manager’s basic job is a contingency one: knowing where work is not progressing satisfactorily and where compensating adjustments are necessary. As we shall see, only through the use of systems controls is this “trouble” identification possi- ble. Furthermore, these controls identify the situations in which organizational and coordination malfunction- ing require some kind of structural change. Every man-

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The manager’s objectiue is a dynamic system of human r e l a t i o w n e that adjusts and

readjusts to uarious pressures.

ager, if maximum productivity is to be attained, must have responsibility for continuously changing and adapting the system. But the where and when are re- vealed only by a control system.

Work flow and the supervisor: building a control system

Understanding the significance of work flow and its regularity in promoting efficiency and productivity also provides the basis for specifying the role of supervisors and managers. Their primary responsibility is to facilitate the maintenance of the work flow. They do this by means that at first seem contradictory: by utilizing mechanisms that stabilize and mechanisms that introduce change. In fact, stability and change are intimately related, as we shall see. Not only are they compatible, but the organization can’t have one without the other.

These, then, are the manager’s primary strategies in dealing with the work flow:

1. Seeking to regularize the flow.

2. Detecting incipient or actual breaks in the flow-that is, sources of irregularity and instability.

3. Intervening to maintain the flow by taking remedial and expediting actions.

4. Assessing sources and frequency of intervention to identify recurrent problems and needed structural changes.

5. Introducing structural change to improve the work flow.

Together, these five integrated steps represent the manager’s control system. They should comprise most of what a manager does with his or her time.

The achievement of this regularity and stability, which is the manager’s objective and the source of productivity, is a never-to-be-attained ideal. The manager is like a symphony orchestra conductor, endeavoring to maintain a melodious performance in which the

contributions of the various instruments are coordinated and sequenced, patterned and paced, in the face of numerous problems: e.g., the orchestra members are having various personal difficulties, stage hands are moving music stands, excessive heat or cold is creating audience and instrument problems, and the sponsor of the concert is insisting on irrational changes in the program.

The manager faces constant internal and external interruptions. In some cases, as we shall see, only palliatives-short-term readjustments such as expediting actions-are needed to bring the system of relationships back to stability. Other disturbances require more drastic action if the system is to be stabilized-the introduction of new methods or technology, for example.

The manager’s objective, then, is not a static system of human relations. Rather, he or she is seeking a dynamic type of stability, making adjustments and readjustments to both internally generated and externally imposed pressures. By these responses to variations in the environment, the manager hopes to maintain a moving equilibrium. The new or modified work- flow pattern may be quite different from its pre- decessor, but the significant element is that there should be a pattern, an observably repeating tempo in the pace with which the work moves from one employee or group to another.

Let us examine in detail each of the five major strategies managers use to attain this objective.

Regularizing the flow of work

It is the manager’s responsibility to promote work-flow regularity. In larger companies, staff groups obviously have a key role to play in job and systems design, but the manager needs to know that the goal is not individual efficiency but group or system continuity and regularity. In any training, criticism, or observation of workers, attention should be directed to the patterns of interrelationship, the mutual facilitation and comple- menting of one job with another to achieve a self- maintaining system.

It is worth repeating this because most man-

184 National Productivity Review

A self-maintaining system does not reduce the manager’s importance.

agers do not understand it. Some are even reluctant to conceive of a self-maintaining system because they naively believe its achievement would reduce their importance. Regrettably, they want to be continually involved in the routine coordination of work-flow stages-perhaps to justify their, pay and status. They need to know that, on the contrary, they should always be working themselves away from such participation. As soon as tasks can be made predictable, they should be delegated to subordinates. The manager’s role is primarily a contingency one: intervening when the routine is broken. In this role, managers will still have much to do, as we shall see-more, in fact, than most managers can keep up with in a dynamic organization faced with the usual amount of technological and human uncertainty.

Detecting system instabilities

The second strategy managers must employ is to analyze how work is proceeding through the system. Work is defined in terms of how the organizational system is sustaining itself in the face of various externally generated buffetings and internally based short- comings.

The need to specify and make explicit the systems component of a job can best be shown by an illustration. Company Y makes an unusual type of photocopier that has many advantages over more primi- tive models made by competitors. However, it is difficult to install, adjust, and operate properly since it is a new model, still undergoing some process and product changes. The company has the following five types of specialists who might be involved in a given installation:

1.

2.

3.

4.

Engineering-responsible for design of the copier;

Manufacturing-handles production and repairs that can’t be done on customer’s premises;

Sales Engineering-works with the customer in both selling the copier and training him in its use;

Installation-sets up, tries out, and ensures that the

customer’s new equipment is operating properly; and

5. Maintenance-handles on-site repairs and adjust-

Now if we concentrate on the installer’s job, for example, we can see how critical a number of boundary relationships are in utilizing his technical skills for maximum benefit. It would be important for his manager to analyze and operationalize these relationships and to communicate to the installer precisely how his job relates to other people in the system. More specifi- cally, the installer needs to be told when to contact whom and the nature of that contact.

We can see some of these boundary phenomena by watching him handle his installation job and observ- ing the interrelationships that need to be programmed (specified, learned, and monitored).

1. It is important to know how much of his installation work should be done in the presence of the customer and the sales engineer. In relation to this, what por- tions of the customer training are handled by the installer and what parts by the sales engineer?

2. When and how should the installer check with either manufacturing or engineering, or both, as to which parts of the copier may pose problems and require either greater installation care or additional customer instruction? Related to this is the question of how much the customer should be told about potential problems with the current production run of the equipment.

3. As the installer detects problems in the way the customer is using the machine, when and how should he alert the sales engineer?

4. When should the sales engineer contact the installer to communicate special problems involved in a spe- cific customer’s installation?

5. When problems are detected during the installation, which ones should require the installer to contact maintenance personnel (to alert them to what is likely to occur)? Which should also require contacts with manufacturing or engineering?

ments.

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I t is pointless, eoen counterproductioe, to respond to inherent or random oariations in

the work-flow system

6 . What are the criteria for halting the installation and returning the equipment? Who should be involved in making this decision?

7. What criteria should management use for making the following decisions?: a. Which installation and maintenance problems

signal the need for new manufacturing procedures or new engineering standards, whose job is it to collect that information, and whose job is it to make the decision?

b. Should consideration be given, in some or all circumstances, to reducing coordination problems by combining maintenance and installation roles?

Intervening: executing corrective actions

The manager goes into action when there is a significant deviation in the functioning of the system. Therefore, the manager must be able to distinguish normal variations in the flow from true deviations. It is pointless, even counterproductive, to respond to inherent or random variations. Any given human or mechan- ical system has random variations, random meaning that there is no way of determining the direction of change. Efforts to eliminate these variations lead to greater instabilities. This can be seen in the operation of a thermostat or an inventory control system. When the decision maker intervenes in response to a random variation above or below the desired operating level of the system, the likelihood that his intervention will push the system further out of control is as great as the chance that it will move the system back toward the desired level. This occurs because with a random variation, there is no clear direction. The system could have been about to turn in the other direction, in which case the intervention might now be pushing it too hard that way.

Thus, it is necessary to establish the variation limits for the desired state, limits within which one will not intervene. These limits represent the inherent random, uncontrollable variation in the system. As shown

in Figure 1, only at points X and Y should there be intervention.

Upper limit of random variation

Desired level

Figure 1. Intervention at Points Beyond the Accept- able Range of Variation

Thus, two workers may not be able to perfectly synchronize their activities because of imperfections in the equipment, the procedures, or the materials or because of other demands on their time. The manager seeks to return the system (of cooperation) to “normal” only when the lack of synchronization exceeds the expected variability.

Short-term actions

To maintain the work-flow system when he detects a true deviation, the manager should initiate what is appropriately called a “short-term” corrective or stabilizing action. The phrase short-term does not mean that corrective action can be applied or completed quickly. It refers to changes that result from, and last only as long as, administrative intervention continues.

Sequences of remedial action that the supervisor takes (or should take) in endeavoring to return the work-flow system to a stable state may involve outside contacts. For example, the unsatisfactory pacing of the activities of a service department may be creating internal problems. The manager may move, through a supe- rior or other channels, to bring the tempo of these activities into better alignment with his or her needs. Alternatively, the manager may have to secure additional personnel through recruitment or obtain permis- sion from higher management for overtime work in order to adjust to pressures for increased output.

From the point of view of the organization as a whole, the manager operating these controls also must


be required to alert his or her manager and others- e.g., “customers,” next stage managers in the flow of work-who may be affected by the departures from equilibrium of the system. This enables them to take complementary actions to prevent the spreading of the disturbance from the jurisdiction of one manager through the entire organization. All these actions can be prescribed and even quantified.

Notification of relevant others is the manager’s first step. The next step is usually an attempt to return the system to equilibrium. Sometimes the manager can do this by his or her own direct intervention, e.g., assigning an employee to work overtime, finding a critical part, delaying the start of the next batch. But frequently the manager cannot simply give an order. He or she must either activate a well-established sequence of contacts to provide the expediting adjustment or engage in a less routine effort to change the behavior of one or more other members of the organization. After the detection of such situations, the manager’s job is the issuance of messages that inhibit some actions, encourage others, slow some down, speed up others, change the directions and intensities of flows, open new channels, end blockages, prevent jams, and thus facilitate the vigorous performance of the basic processes of the organization.

Often these interventions can be quite simple and direct. Noting that a delay in the production of parts from a preceding step in the work flow may cause a lack of work in his or her department, the manager may

negotiate a temporary adjustment. He or she might issue a memo such as the following to the supervisor of the other department: “Don’t wait until you have my full day’s requirements; send me what you have every hour. If necessary, send half-completed units, and we’ll do the finishing in our department, or I can lend you one of my staff to boost your output for today.”

The most typical short-run adjustments change the tempo of the sequential pattern of the work flow. The phrase “walk through” is often used to mean that, rather than putting a request or an endorsement or an approval through the normal organization channels, the manager accelerates the process. Usually a subordinate literally carries the paper to the people who must sign or initial it. Working overtime is a similar type of adjustment to emergencies. Less frequent are the invoking of special procedures, such as use of a company plane to obtain a part that would normally be delivered by the vendor. On occasion, a whole series of meetings are scheduled or a task force assigned to handle an unusual problem. These also serve to change the parameters of the work flow connecting the various stages. The manager may step into a temporary position in the work flow, for example, to reduce the pressures on a subordinate who is near the breaking point. (Here the manager is serving as a temporary buffer.)

Changes in one specification obviously have ramifications for other groups that are working on the same project or using the same part. Therefore, many of these short-term remedial procedures require the manager to communicate with outside groups in rapid succession. Doing this in the right sequence is important. A delicate sense of timing is necessary, as the following example from my research suggests.

As soon as we discovered that this was not functioning the way it was supposed to, we had to notify these other groups. But we had to be very careful; if handled badly, this could have given the X group an excuse to “slip” their schedule (i.e., justify not meeting a production schedule), something they have been trying to do. And after we notified people, there were still precautions to take. Now everyone is dubious about the thing, and they are fearful about accepting it or believing anything we

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Short-term remedial measures should disappear when controls show that the system has stabilized.

say that is good about it. So we have to spend a good deal of time in meetings reassuring people, trying to get a more relaxed atmosphere. Also we have to get them to give us more time. They usually want immediate results or an excuse they can give top management, but we just want more time and ask people to bear with us and not panic.

Without the right actions in the right sequence and frequency, the manager who has bad news to announce, such as a significant deviation that is going to affect the flows of others, can create a panic that will make his or her job and that of other managers doubly difficult.

Sometimes the number of meetings, telephone calls, and negotiating sessions required to resolve rather small crises is staggering. Minor disagreements over the quality of a particular part can initiate a series of interactions lasting for weeks. For example, one later-stage group announces that the material received from an earlier-stage group is unacceptable. This throws off the work schedule of another manager who insists that the material is acceptable. Evidence, both relevant and irrelevant, is gathered from other parts of the organization; each such mission also requires pro- longed, persuasive contacts. Managers call one another for aid and support. Finally a settlement is negotiated.

In arranging all these short-term remedial measures, the manager must have in mind a clear operational picture of what is occurring. These are short-term correctives that should disappear when his controls indicate that the system has returned to stability. Other- wise, the manager will find that he has taken on new administrative patterns that are permanent drains on his energy. Therefore, the manager has to be aware of what changes he has introduced and of the need for continued monitoring during the emergency. Needless to say, many forget this in the excitement of coping with the problem.

Limitations of short-term actions

Every time a short-term measure is invoked, valuable managerial time and energy is expended.

Meetings and the arrangement of rarely used special procedures are examples of the time- and energy-con- suming activities often required. Also, because these expediting interventions are emergency measures designed to return the work flow to synchronization, they are often initiated under great pressure (to avoid efficiency losses) and among people who are not in regular contact. Such pressures to change routines and provide help can generate emotional costs that impede other work flows or drain energy. In fact, some organizations literally tear themselves apart as a “falling dominoes” sequence is established. A work-flow disturbance pro- duces managerial intervention. This upsets other work flows and individuals (who are requested to take adap- tive action), which, in turn, disturbs the first or yet other work flows, which requires further managerial interventions that cause more disturbances.

Thus, some of the manager’s work-flow problems cannot be solved by continuing short-term adapta- tions. To put this in more quantitative terms, the manager must be concerned not only with the rate of change but with the rate of the rate of the change (the second derivative). Where disturbances are accumulating, short-term corrective actions are wasteful, either because they fail to rectify the problem or because there are underlying structural problems requiring attention, or both.

The administrator who relies solely on short- term corrective actions is ignoring one of the most important parts of his or her job-seeking out and remedying the persisting and compounding problems. These require the introduction of changes in the organizational constraints: the flow of work, the components of jobs, the incumbents of jobs, the structure of au- thority, and even the controls themselves.

We shall endeavor to give an operational description of this change process as an integral part of the manager-leader’s day-to-day administrative activities. The analysis lends itself to behavioral quantification and objective validation so that the organization can provide for change within its structure and appraise the success of its members in carrying on these patterns. Rather than being undertaken as a “last straw,” when all else has failed, organizational change can precede


serious crisis. Furthermore, administrators can be trained in unambiguous behavioral skills to handle such programs.

Determining where structural (long-run) change is needed

The following types of administrative problems indicate that structural change is needed:

Recurrent Problems. These situations repeat in a highly predictable fashion. Remarks such as “Every week I get involved in at least one argument with the department over schedules” are warning signals. Chronically unbalanced work loads for certain subordinates or persistent shortages of resources can drain the manager’s time and energy, because at each disturbance he or she may have to invoke emergency measures.

“High-Amplitude’’ Problems. Such disturbances involve major deviations from planned patterns of interaction and work flow. They are very costly, taking everyone from their regular work to tackle last- minute rush jobs, crash programs, and task-force inves- tigations. They not only devour managerial time but disturb the regular work habits of subordinates. Even though irregular in occurrence, such problems are worth identifying because of their seriousness.

“Spiraling” or “Long-Chain” Problems. Fig- uratively, an initial “infection” (disturbance) in the organizational system “spreads” to other flows , and these new upsets cause further reaction. Thus, the origi- nal difficulty is magnified as many groups become involved. As managers make compensating adjustments to deal with their own problems, these accumulate and begin to create their own backlash of disturbances. These problems may not be recurrent; they just are never solved.

clude a summary of his own use of short-term remedial actions. He should know where and for what he spends his scarce time resources. The incidence of such disturbances identifies problems that may require long-term, as distinct from “ fire-fighting” or short-term, managerial actions. In the same fashion, repeated requests for aid can signal internal problems in the work flows of employees. The accumulated information on disturbances enables managers at any level in the hierarchy to monitor the intersection points of the flows over which they have jurisdiction as well as some of the internal dynamics of the jobs of managers below them. These represent second derivatives, the rate at which deviations show up, the rate of the rate of change, a key indicator of whether short-term adjustments are sufficient.

There are three sources of problems requiring long-run change. One is internal stresses and strains that have not been solved by previous short-term efforts. Another is externally based problems; for example, another work group whose timing or standards of performance are a source of disturbance. The third is new factors-new equipment, new market forces, or new management controls and structures-to which adjustment must be made.

Problem diagnosis The administrator needs to be able to identify in an organization the elements that are most susceptible to breakdown under the pressures of day-to-day organizational life. These are the individuals and jobs receiv-

For diagnosing whether structural change is needed, the manager’s monitoring system should in-

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Many managers are so busy “putting out fires” that they neoer find the source of the recurring blazes.

ing the greatest buffeting because of the way in which the structure has evolved. For example, a manager should know that a subordinate in charge of some scarce resource subject to heavy and incompatible demands from other groups in the organization is vulnerable to breaking down.

Other examples of organizational vulnerability could be cited. However, the significant point is that the manager can be in a position to identify both the problem and its source in the organization. Then the manager must make a choice, asking: What are the costs of continuing to function with the defect in structure as compared with the costs of introducing a change? The former are the actual losses due to work-flow interruptions plus the drains on managerial time created by the need for constant intervention to deal with the haggling and internecine conflict and to restore work flows. These costs, which are rarely measured faithfully by existing cost-accounting systems, have to be compared with the not inconsiderable costs of changing the structure. The latter may mean not only retraining people but also persuading both those who must approve the change and those who must change that the new pattern is worthwhile. Fearing the recalcitrance and lethargy of the organization, many managers shy away from the attempt to introduce long-term change.

Introducing change

Here we must neglect detailing the managerial activities associated with introducing structural change to remedy problems that require repeated managerial intervention and thus “bleed” an organization of its vitality. We only wish to stress that, paradoxically, change is necessary to maintain stable work-flow systems. It is only through structural change that new internal or external problems that threaten the viability of work-flow systems can be coped with.

Good administration thus involves continual change: marginal (i.e., short-run) shifts here and there to remove sources of instability and deviation, then long-run changes, as highlighted by the control system.

Most organizations do not function this way, and as a result they face needlessly high administrative expenses because managerial problems accumulate and are not solved. Eventually, the costs become so heavy that a major crisis is precipitated. The ensuing shake-ups are, in themselves, enormously costly. It often takes months, sometimes years, for the members of an organization to reestablish stable patterns of work that provide efficient ways of achieving coordination.

Such crises are partially the result of failure to comprehend the pattern of managerial activity and transmit such an understanding to managers. It is often assumed that detecting the need for change and manag- ing this change are tasks reserved for top management, i.e., that the quantity of innovation should be propor- tional to the level in the hierarchy.

But the problem is also one of proper monitoring-ensuring that each manager is appraised in terms of his ability to stabilize his flows and introduce change where serious instabilities are present. This requires appropriate detection mechanisms-and rewards-op- erated by successive levels of management.

Overemphasis on short-term remedies is also at fault. Nothing could be less appropriate for the complex, dynamic organization. But short-term palliatives can seem more attractive than long-term answers. Usu- ally a manager must spend a great deal of time convinc- ing superiors in the organization that a structural or long-term change is necessary, even before he or she gets an opportunity to engage in the difficult job of establishing the change in the organization. Many managers, or leaders, are kept so busy “putting out fires” that they never have time to find the source of the recurring blazes. In a sense, a rather substantial capital investment, in terms of time and energy, is necessary to provide a more permanent solution. The manager must take time from his or her regular activities to engage in lengthy “selling” contacts with superiors and others and to undertake the major problems of coping with affected subordinates. Many lack the energy and the ability to do this, which is the major reason for failure to introduce change at an appropriate rate in the organization; recalcitrance of subordinates and the persistence of habit are secondary.


Conclusion We have endeavored to present an operational

description of the control process as an integral part of the manager-leader’s day-to-day responsibility for work-flow efficiency. This analysis lends itself to behavioral quantification and objective validation so that the organization can provide for change within its stmc- ture and appraise the success of its members in carrying on these patterns. Rather than being introduced as a “last straw,” when all else has failed, change should anticipate serious crises.

In our view, the control process consists of this interrelated, sequential program for guiding managerial action:

1. Specifications for organizational and technical checks (of prescribed characteristics and frequency) on the stability of the system under the jurisdiction of the manager.

2. Established criteria for evaluating significant deviations from the desired stable state.

3. Prescribed administrative patterns of corrective action to bring the system back to equilibrium (short- term change).

4. Requirements for appraisals of recurring or continuing instabilities in the system with provision for staff (or specialist) assistance in investigating potential structural sources of organization stress and remedial measures.

5 . Administrative patterns for implementing long-term organizational structural change.

Basic to our view of controls as an administrative activity is the concept of marginal adjustment. In general, the manager does not make the decision (or plan) that shapes the future. Rather, he constantly makes readjustments in what he and his people are doing as he gains new information, new and unforseen problems emerge, and the feedback accumulates. A manager cannot afford to think in absolutes, of fixed positions. The world of the organization doesn’t permit this type of absolutist thinking. Administration is an iterative process; the manager must constantly rethink old decisions, remake tacit and explicit agreements

with external groups, and adjust the directions he has given to subordinates.

The manager’s overall objective does not change, however, and this must be the basis for the monitoring effort. A control system is conceived as the process by which perturbations in the work systems- disturbances and irregularities-are gradually brought under greater control, i.e., the limits of variability are decreased. In essence, this means that the manager seeks techniques and adjustments to make the system more self-maintaining, self-regulating, more nearly a reciprocating work-flow model (in which lateral contacts predominate). His efforts to minimize interventions, i.e., to reduce the leadership component of his administrative actions, are not likely to be blessed with complete success. But if the proper short- and long- term adjustments are to be made, the manager must have this in mind as the goal toward which he is directed.

We have stressed assessment of the interrelationship of jobs in work systems. The manager must know the operating characteristics of the system and must not allow individual subordinates to do their jobs in whatever way is best for them regardless of the impact on others. And the manager does not wait to measure the results or outputs. Surveillance mechanisms are in constant use, and subordinates must learn the complex behavioral patterns that will fit their activities into the network of others’ activities. Only in this way is the manager in a position to increase productivity. With targets the manager is a policeman; with systems controls he or she goes back to being a manager!

Leonard R. Sayles is a professor at Columbia Uni- versity’s Graduate School of Business, specializing in management and organizational behavior. He has written extensively on managerial behavior and the coordination problems of complex organizations. The material included in this article is from a forth- coming book on managerial controls. This project is receiving funding from the Center for Research and Career Development, Columbia’s Graduate School of Business.

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Using systems controls to boost productivity