The Controlling Concept. Horváth & Partners Management Consultants

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      Fig. 1.4: Controller Mission Statement of the International Group of Controlling (IGC 2013)

      In general, through coordination, controllers help solve problems caused by the increasing impact of these environmental factors:

      •Increasing dynamism and volatility

      •Ongoing globalisation

      •Changes in value creation owing to new technologies

      •Increasingly shorter product life cycles

      •The spread of digitisation across all organisations

      Controlling enables corporate management to face these challenges head-on with innovative solutions, instead of relying on old, outdated remedies.

Which concrete strategic and operative challenges does your company face?

      However, Controlling is not merely a service to enable management to “cover their backs” with the information it provides. It is also an idea which all employees in a company should take to heart. This idea consists of two aspects. First, acting, and taking personal responsibility for one’s actions, to further the company’s bottom line and in line with corporate planning; and second, thinking outside of one’s specific remit and embracing the concept of interface management. Thus, Controlling is not only carried out by controllers but ideally on the spot by the member of staff directly affected. In this way, Controlling is increasingly transitioning into self-Controlling; more than ever, controllers are undertaking “missionary work” to spread the underlying idea behind Controlling.

1.4Role and job description of the controller

      Now that we have discussed the tasks of Controlling, let us turn to the controller as a person and their position in the organisation. As already mentioned, on the one hand, controllers support management, but on the other hand, they also have decentralised (local) activities in that they spread the word about the idea of controlling among employees. Through their involvement in the planning process and the attendant need for information supply, they provide direct support for corporate management. That being said, controllers are active on all tiers of the hierarchy and in all corporate functions. Accordingly, we are starting to see a differentiated Controlling organisation among larger companies, one which is made up of both central and local controllers.

      At this stage, however, we do not want to discuss organisational details – that is the subject of Chapter 8. At the moment, it is enough to say that alongside the performance management model and the claim to leadership of the management, the tasks and position of the controller depend heavily on the size of the company. Thus, for small and mid-sized enterprises it is typical for the controller to be a “Jack-of-all-trades” and not only deal with purely Controlling tasks, while large companies often employ specialists for sub-sections of Controlling in their finance and business functions.

      Hence, one way of further defining the tasks of controllers and their position within the leadership structure of a company is to take a look at the respective job description.

Is there a job description for the controllers in your company?

      Fig. 1.5 shows the job description of the head of controlling in a mid-sized company. The job description provides information about the rank and chain of command/line of reporting of the controller and their precise fields of activity, competences and powers. Hence, it is particularly suited to clarifying the framework of the controller’s activities and to clearly document the position of the controller.

      Fig. 1.5:Job description of a controller

      For the following sections it is important to bear in mind the picture of Controlling within the management system of the company. Based on these underlying tasks of controllers – coordinator of planning, control and information supply – we can derive all their fields of activity and consolidate them in a cohesive and meaningful framework.

1.5The “House of Controlling” – Building blocks of an effective controlling system

      Based on the aforementioned definition of Controlling, the controller’s remit covers tasks relating to planning, control and information supply. In the following section, this framework will serve as the basis for deriving the building blocks of a comprehensive and effective Controlling system.

      In order to illustrate both the basic idea and the necessity of Controlling, we will first look at the following classical questions that should be asked in a company (cf. Fig 1.6). If you are able to answer all of these questions with a definitive “yes”, then feel free to put this book back down again, as your Controlling function is top of the line. If not, then perhaps you should read on.

      Fig. 1.6:Eight examples of questions on the necessity and basic concept of Controlling

      Every company has a specific strategy which they pursue by appropriately designing their operative processes and creating a suitable organisational structure. The Controlling system is embedded in this organisation. When it comes to the tasks, organisation and instruments involved, Controlling must form a cohesive entity, and must deliver a complete system. In this sense, a Controlling system comprises all the components necessary for executing each and every aspect of the Controlling function.

      In all, the Controlling system and its components serve management as management utilises the planning system by creating concrete plans, and to do so processes the information extrapolated by controllers from their information network to finalise decision-making.

      For this reason, an effective Controlling system must comprise all components required to guarantee the supply of target-orientated information. This helps management’s decision-making, as management is ultimately responsible for shaping the entire value chain appropriately to suit the changing environment.

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