Tuesday, 15. September 2015

Controlling – Components of Success

What makes controlling future-oriented? What are the components of success? More than 120 participants enjoyed the congenial atmosphere and stimulating contributions of controlling experts and managers from a wide range of industries at this year’s WHU Campus for Controlling.

At the start of the conference, Professor Jürgen Weber stated that a key part of the controller’s role, namely assuring management rationality, would become even more important in future. Opportunism and the cognitive limitations of managers make it essential that there is a “controlling culture“ based on transparency, an open exchange of information, constructive criticism, and target-oriented behavior, which all help to prevent wrong decisions being made and contribute to a company’s success.

This message was continued by Dr. Peter Scherpereel, Head of  Controlling Generation & Trading at RWE, who described how systematic errors can occur due to an individual‘s perception and evaluation – so-called biases – which can have catastrophic consequences for companies. RWE, one of Europe’s leading utility companies, has adopted measures to prevent biases by implementing debiasing techniques in decision-making processes. However, there are other factors that are also important for determining how effective these measures will be. It is necessary to create awareness for the issue, to obtain the support of top management, and also to roll out the concept within the company, either in workshops, through transparent communication, or with references in decision-making documentation.

Zalando started out by selling humble flip-flops and yet since June 2015 the company is listed in the MDAX. Current group revenues are 2.4 billion euros and the company counts around 16 million active customers. Dr. Jan Kemper (Senior Vice President Finance) and Dr. Jörgen Engelbergs (Vice President Controlling) of Zalando described the controllers of their the early days as generalists who had little opportunity to “control”. The development to critical counterpart and sparring partner of management has taken place gradually over the years and in accordance with stakeholders’ needs. Zalando now has a controlling organization that combines finance, customer, and sales perspectives and also facilitates the communication of essential information internally.

In her presentation entitled "Warum noch miteinander reden? - Die Interaktion von Controller und Manager in Zeiten der Digitalisierung" (Why talk to each other? – The interaction beteween controllers and managers in the era of digitalization), Leona Wiegmann (doctoral student at the IMC) presented the latest findings of the WHU Controller Panel. On the one hand, the study shows that modern IT systems are causing the focus of controller activity to shift from the supply and aggregation of data towards data analysis and interpretation as well as communication and discussion. This puts controllers in a stronger position to pursue business partnering activites. On the other hand, the study makes it clear that managers are more than happy with the flexible, customized, self-service options available to them, which allow them to find their own information without the help of controlling. However, this does not mean that managers are willing to do away with discussions with the controlling department – in fact, it is quite the opposite. Modern IT systems provide an opportunity to get involved in more substantive discussions and to address problems together. The extent to which this opportunity is turned into reality, however, depends on whether both sides seize the chance.

Leica Camera AG had been facing a number of problems as a result of bad decisions concerning digitilization and other historical developments. The ”OSCAR” project, which was presented by Volker Hagemann, Head of Controlling, was successful in establishing a client-oriented controlling organization, standardizing queries and reports, and enabling interactive access to figures and reports during meetings. Roles are now allocated within the controlling department, which differentiate between experts, who are contact points for specific technical areas such as purchasing or investments, and business partners, who provide a more communicative and people-oriented role and are contact points for departmental managers. Moreover, applications, key figures, parameters, and filters have been defined in detail, which has greatly improved the clarity of communication between managers and controllers (in the role of business partner). The standardization of queries and reports has also meant that the latest figures and reports are now available online. Data selection options ensure interactive, flexible access to data. On the whole, this has contributed to better corporate management and more recognition from managers.

What is the job specification that controllers will have to fulfill in future and what new tasks will they face? In the podium discussion, Volker Hagemann (Leica Camera AG), Dr. Mark Jehle (Merz Pharma GmbH & Co. KGaA), Stefan Prause (Bayer AG), and Björn Radtke (CTcon GmbH) discussed the next generation of controllers. The experts are certain that there will be higher expectations placed on business partners and social skills, such as interaction and communication, will become increasingly important. For the foreseeable future, however, it will still be possible to pursue a career in traditional controlling as well as the new, management-oriented career as business partner.

The next WHU Campus for Controlling will take place on 16 September, 2016.