The First Step In Controlling Consists Of

The first step in controlling anything, from personal finances to complex business operations, fundamentally hinges on establishing clear and measurable standards. Without a well-defined yardstick, efforts to control are like navigating uncharted waters – directionless and prone to failure. This principle applies universally, whether you're striving to manage your weight, improve team performance, or optimize a manufacturing process. Understanding the crucial role of setting standards is the cornerstone of effective control.

Why Setting Standards is Paramount

Think of it like this: you can't adjust a thermostat if you don't know what temperature you want the room to be. Setting standards provides that desired temperature, that crucial benchmark against which actual performance is measured. This benchmark then illuminates deviations, allowing for corrective actions to be taken.

Here's a breakdown of why establishing standards is the bedrock of any control process:

• Provides a Clear Target: Standards define what is considered acceptable or desirable performance. This clarity helps individuals and teams focus their efforts and understand what is expected of them.
• Enables Measurement and Evaluation: Standards make it possible to objectively measure actual performance and compare it against the desired level. This comparison highlights areas where performance meets, exceeds, or falls short of expectations.
• Facilitates Identification of Deviations: By comparing actual performance to established standards, deviations or variances become apparent. These deviations signal potential problems or opportunities for improvement.
• Triggers Corrective Action: Once deviations are identified, corrective actions can be taken to bring performance back in line with the standards. This ensures that the desired outcomes are achieved.
• Supports Continuous Improvement: The control process, initiated by setting standards, allows for continuous monitoring and evaluation. This feedback loop facilitates ongoing improvement and optimization.
• Enhances Accountability: When standards are clearly defined, individuals and teams are more accountable for their performance. They know what is expected of them and can be held responsible for meeting those expectations.

Types of Standards in Control

Standards aren't monolithic; they manifest in various forms depending on the context and what you're trying to control. Understanding these different types is essential for choosing the most appropriate standards for your specific needs.

• Physical Standards: These standards are expressed in physical terms, such as quantity, quality, size, weight, or dimensions. For example, a manufacturing company might set a physical standard for the dimensions of a product or the weight of raw materials used.
• Cost Standards: These standards relate to the cost of production, operation, or any other activity. They might include standards for material costs, labor costs, overhead costs, or total costs.
• Revenue Standards: These standards focus on the revenue generated from sales or other sources. They might include standards for sales revenue, revenue per customer, or market share.
• Capital Standards: These standards pertain to the use of capital resources, such as equipment, buildings, or investments. They might include standards for return on investment, asset utilization, or debt-to-equity ratio.
• Goal Standards: These standards define specific goals that an organization or individual aims to achieve. They might include goals for customer satisfaction, employee engagement, or innovation.
• Program Standards: These standards define the criteria for evaluating the effectiveness of a program or initiative. They might include standards for program participation, program outcomes, or program cost-effectiveness.
• Intangible Standards: These standards are more difficult to quantify but are still important for control. They might include standards for employee morale, customer service, or brand reputation.

The key is to choose standards that are SMART:

• Specific: Clearly defined and focused.
• Measurable: Quantifiable and trackable.
• Achievable: Realistic and attainable.
• Relevant: Aligned with organizational goals.
• Time-bound: With a defined timeframe for achievement.

The Process of Setting Effective Standards

While the concept of setting standards seems straightforward, the actual process requires careful planning and execution. Here's a step-by-step guide to setting effective standards:

1. Identify Key Areas for Control: The first step is to determine which aspects of the operation or activity need to be controlled. This involves identifying the critical factors that influence the desired outcomes. For example, in a restaurant, key areas for control might include food quality, service speed, customer satisfaction, and cost of goods sold.
2. Define Specific Objectives: Once the key areas are identified, specific objectives need to be defined for each area. These objectives should be clear, concise, and aligned with the overall goals of the organization. For example, an objective for food quality might be "to consistently serve dishes that meet or exceed customer expectations."
3. Establish Measurable Standards: After defining the objectives, measurable standards need to be established for each objective. These standards should be quantifiable and trackable, allowing for objective assessment of performance. For example, a measurable standard for food quality might be "customer satisfaction rating of 4.5 out of 5 stars."
4. Communicate Standards Clearly: It's crucial to communicate the established standards clearly to all relevant stakeholders. This ensures that everyone understands what is expected of them and how their performance will be evaluated. Communication can be done through training sessions, written policies, or regular performance reviews.
5. Monitor Performance Regularly: Once the standards are in place, performance needs to be monitored regularly to track progress and identify deviations. This can be done through various methods, such as data collection, observation, and feedback from stakeholders.
6. Evaluate Performance Against Standards: The collected performance data needs to be evaluated against the established standards to determine whether performance is meeting, exceeding, or falling short of expectations. This evaluation should be objective and based on the measurable standards.
7. Take Corrective Action: If performance is not meeting the standards, corrective actions need to be taken to bring performance back in line. This might involve identifying the root causes of the deviations and implementing solutions to address them.
8. Review and Revise Standards Periodically: Standards should be reviewed and revised periodically to ensure that they remain relevant and aligned with the changing needs of the organization. This might involve adjusting the standards based on performance data, feedback from stakeholders, or changes in the external environment.

Examples of Standards in Different Contexts

To illustrate the application of standards in different contexts, consider the following examples:

• Manufacturing: A manufacturing company might set standards for the number of units produced per hour, the defect rate, and the cost of raw materials.
• Customer Service: A customer service department might set standards for the average call handling time, the customer satisfaction rating, and the number of resolved complaints.
• Sales: A sales team might set standards for the number of sales calls made per day, the conversion rate, and the revenue generated per salesperson.
• Healthcare: A hospital might set standards for patient wait times, infection rates, and patient satisfaction scores.
• Education: A school might set standards for student attendance, graduation rates, and standardized test scores.
• Personal Finance: An individual might set standards for monthly savings, debt repayment, and investment returns.

Common Pitfalls to Avoid When Setting Standards

While setting standards is essential for control, it's important to avoid certain pitfalls that can undermine the effectiveness of the process:

• Setting Unrealistic Standards: Setting standards that are too high or too low can be demotivating and counterproductive. Standards should be challenging but achievable, taking into account the capabilities and resources available.
• Setting Vague or Ambiguous Standards: Vague or ambiguous standards can lead to confusion and inconsistency in performance. Standards should be clear, specific, and measurable, leaving no room for interpretation.
• Focusing on Too Many Standards: Trying to control too many aspects of the operation can be overwhelming and distracting. It's important to prioritize the most critical areas for control and focus on setting standards for those areas.
• Failing to Communicate Standards Effectively: If standards are not communicated clearly to all relevant stakeholders, they will not be effective. Communication should be clear, concise, and tailored to the audience.
• Ignoring Feedback from Stakeholders: Stakeholders can provide valuable feedback on the appropriateness and effectiveness of standards. It's important to solicit and consider this feedback when setting and revising standards.
• Failing to Revise Standards Periodically: Standards should be reviewed and revised periodically to ensure that they remain relevant and aligned with the changing needs of the organization.

The Link Between Standards and Key Performance Indicators (KPIs)

Standards are closely related to Key Performance Indicators (KPIs). In fact, KPIs are often derived from established standards. KPIs are specific, measurable, achievable, relevant, and time-bound metrics used to track progress towards strategic goals. Essentially, a standard sets the desired level of performance, and the KPI measures whether that standard is being met.

For example, if a company has a standard for customer satisfaction (e.g., average customer satisfaction score of 4.5 out of 5), the KPI would be the actual customer satisfaction score, tracked regularly to assess whether the standard is being achieved. The KPI allows for monitoring progress and identifying areas where corrective action is needed.

Setting Standards in the Age of Agile and Remote Work

The rise of agile methodologies and remote work presents unique challenges and opportunities for setting standards. In agile environments, standards need to be flexible and adaptable to changing requirements. Teams need to be empowered to set their own standards, within the framework of overall organizational goals.

In remote work environments, clear and well-communicated standards are even more critical. Asynchronous communication and reduced face-to-face interaction require that standards be explicit and easily accessible. Technology can play a key role in monitoring performance against standards and providing feedback to remote teams.

The Importance of Employee Involvement in Setting Standards

While management ultimately sets the overall direction, involving employees in the process of setting standards can significantly enhance their effectiveness and acceptance. When employees are involved, they are more likely to understand the rationale behind the standards and feel a sense of ownership.

This can lead to increased motivation, improved performance, and a greater willingness to adhere to the standards. Employee involvement can also provide valuable insights and perspectives that might not be apparent to management.

Conclusion: The Indispensable First Step

In conclusion, the first step in controlling anything is undeniably the establishment of clear and measurable standards. These standards provide the foundation for effective monitoring, evaluation, and corrective action. By setting SMART standards, avoiding common pitfalls, and involving employees in the process, organizations and individuals can create a powerful control system that drives performance and achieves desired outcomes. Without well-defined standards, control efforts are simply shooting in the dark, hoping to hit a target that isn't even visible. Embrace the power of standards, and you'll be well on your way to achieving your goals.