International Finance
Event Preview Magazine May - June 2018

Controlling key to management efficiency

Ahead of the 7th Business Performance Management Conference, Frank Danesy, Head of Business Unit Control, Directorate of Operations, European Space Agency, Germany talks about the role of controlling in a strategic context

Could you briefly explain the role of controlling in a strategic context and your approach to this in your organisation?

Together with planning, organizing, and directing, activities related to controlling belong to the key functions of management. Controlling is an essential activity because it enables managers to track an organisation’s progress towards the achievement of its objectives and to detect deviations from the intended course of action. Controlling has to be a continuous process that is embedded in each level of an organisation’s hierarchy. This includes the top-level of the organisation where strategic objectives are decided upon. In the strategic context, the choice of control metrics should be based on the specific strategic objectives contained in the strategic plan. These objectives are related to financial targets, the customer base, internal operations, and the organisation’s human capital.

Once you have defined your strategy as an organisation, how do you track and control your progress towards achieving your strategic objectives?

In order to be effective, strategic objectives have to be aligned with the organisation’s strategic vision and mission. Strategic objectives should be formulated so as to ensure that the organisation actually achieves its strategic vision and mission and does not stray from it. One of the key characteristics of any objective is that it is SMART (i.e. specific, measurable, achievable, realistic and time-bound). Strategic objectives are no exception. By making our strategic objectives SMART, we lay the foundation for the definition of the key performance indicators (KPIs), which, in turn, enable us to track our progress towards the achievement of our strategic vision and mission.

How do you overcome difficulties in getting insights on business performance management from the business units?

This is an interesting multi-layered issue and, in fact, the real crux of controlling. Three points come to mind: Firstly, the choice of metrics is essential and requires careful consideration. If a chosen metric does not allow a clear indication of whether progress is being made, it should probably not be used. Secondly, some may argue that not all progress is measurable and therefore not all objectives can be measurable in the sense of being SMART. While this may be true, experience has shown that there are enough alternative ways of looking at objectives to find a meaningful metric. Thirdly, there is the human element. Some managers prefer “soft KPIs” (e.g. encourage employee buy-in, give constructive feedback, and display empathy). While these KPIs certainly have their place, their value in the strategic context has to be weighed against their ability to assess progress towards the bottom line.

How do you deal with a certain level of resistance to certain metrics?

Dealing with resistance has much to do with achieving a common vision of the desired long-term outcomes and the corresponding need to make short- and medium-term adjustments. A common understanding of the opportunities and risks is of paramount importance. If we, as managers, fail to take advantage of the opportunities and to avert the risks, we are not doing our jobs as we should. Ultimately, managers are accountable for their contributions to the achievement of strategic outcomes. It is the very reason why they hold a given role. The willingness to use meaningful metrics starts at the top of the organisation and cascades down. The more determined the top-management is to measure its progress towards a strategic goal, and thus lead by example, the more willingness there is in the remainder of the organisation to follow accordingly. In the end, it is all about leadership.

What would you like to achieve by attending the 7th Business Performance Management Conference?

The themes addressed in this conference will undoubtedly be very stimulating and something to look forward to. I am particularly interested in hearing the views of other participants. Most of them come from business fields very different from my own and this profoundly adds to the diversity and therefore value of the event. Finally, I am also looking forward to networking and learning, because no matter how experienced we are, I believe that we can always learn from each other.

About Frank Danesy:

Frank Danesy is the chief controller and Senior Financial Officer of the Directorate of Operations at the European Space Agency (ESA). In this capacity, his responsibilities have included the oversight of the resource planning and utilisation of all of ESA’s manned space projects and mission operations including those related to the International Space Station, the Rosetta/Philae mission to the comet Churyumov–Gerasimenko, and the European Commission funded and directed Copernicus/Sentinel missions. Dr. Danesy began his career with the Armed Forces and over a period of more 25 years he has held a variety of prominent positions in academia and the aerospace sector. He holds a Bachelor of Science in Business Administration as well as master’s degrees in Business Administration (BU), Space Studies and Strategic Intelligence. His doctorate is in Business Administration with a focus on conflict management and leadership (FUB). Equipped with a commercial pilot license and instrument rating, Frank Danesy is an avid land- and sea-plane pilot. In his leisure time he enjoys sports and playing the guitar.

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