Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal [Hardcover]

Robert Simons (Author)

Book Description

ISBN-10: 0875845592 | ISBN-13: 978-0875845593 | Publication Date: November 1, 1994 | Edition: 1

Based on a ten-year examination of control systems in over 50 U.S. businesses, this book broadens the definition of control and establishes a critical bridge between the disciplines of strategy and accounting and control. In addition to the more traditional diagnostic control systems, Simons identifies three new control systems that allow strategic change: belief systems that communicate core values and provide inspiration and direction, boundary systems that frame the strategic domain and define the limits of freedom, and interactive systems that provide flexibility in adapting to competitive environments and encourage organizational learning. These four control systems, according to Simons, will provide managers with the basic levers for pursuing strategic objectives.

Product Details

• Hardcover: 232 pages
• Publisher: Harvard Business Review Press; 1 edition (November 1, 1994)
• Language: English
• ISBN-10: 0875845592
• ISBN-13: 978-0875845593
• Product Dimensions: 9.6 x 6.4 x 0.9 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #686,278 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

15 of 16 people found the following review helpful:

4.0 out of 5 stars Focus on strategy implementation, March 3, 2000

By 

A Customer - See all my reviews

This review is from: Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal (Hardcover)

The book is far more interesting than the title suggests. "Levers of control" makes one think of man/woman being reduced to robots directed by the pulling of levers. The book is exactly about the opposite, how one can have his cake and eat it. It provides a practical framework on how to combine opposing forces in managing a company. Opposites like creativity and meeting profit objectives, precise objectives and alertness to the necessasity of changing course, reward and punishment, control and freedom. Some of the insights require reader effort to understand. For example. "Strategic planning is useless to develop strategies. Strategic planning starts once the strategy has been determined." What is meant is this. Long range planning carried out by staff departments trying to involve managers is a waste of time. Real strategies evolve interactively between several layers of managers in the organisation. Once a strategy is determined a plan must be made for implementing it. However the reader has to figure out that strategic planning no longer means strategy development but the development of a plan for strategy implementation, the execution of which has to be monitored. The book covers how to deal with the positive and negative motivations of employees, how it is possible to manage the tension between a budget system (referred to as a diagnostic system) and an action oriented intelligence-gathering system (referred to as an interactive control system). These two "control systems" are combined with two higher level "control systems", the vision and core values on the one hand and clarification of authority, accountability and no-go areas (referred to as boundary systems)on the other. None of these "control systems" are original. The originality of Prof Simons is that he shows how to operate these systems so that they reinforce and complement each other. This book is very useful for persons that have experienced how hard it is to implement strategies and to reconcile freedom with the requirement of delivering predictable financial results.

2 of 2 people found the following review helpful:

5.0 out of 5 stars Fantastic book on how to focus your organizational efforts, September 2, 2005

By 

David W. Taylor (Santa Barbara CA) - See all my reviews
(REAL NAME)   

This review is from: Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal (Hardcover)

One of the key concepts in this book is how difficult it is to balance the company's need for predictable results with its need for innovation. How do you stay on track while being able to identify new opportunities? Dr. Simons emphasizes the scarcity of management attention and the importance of realizing there are too many "good ideas" to pursue. The countervailing levers he has identified, allow management to reduce risk in the right areas thus freeing the organization to achieve higher levels of productivity. Great book for seasoned leaders responsible for designing and implementing strategy.

3 of 4 people found the following review helpful:

5.0 out of 5 stars Innovative thinking about how control systems can drive strategic renewal, January 27, 2007

By 

Robert Morris (Dallas, Texas) - See all my reviews
(TOP 50 REVIEWER)    (HALL OF FAME REVIEWER)    (VINE VOICE)    (REAL NAME)   

This review is from: Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal (Hardcover)

I read this book when it was first published in 1994 and recently re-read it, curious to see how well it has held up. My conclusion? Very well indeed. What I find especially noteworthy is the fact that, only decade ago, there was nowhere near the understanding and appreciation of innovation that we have today. As I compose this brief commentary, Amazon offers 40,135 books on the general subject and 8,707 on innovation management. That is amazing.

In any event, Robert Simons wrote this book in order to explain "how managers use innovative control systems to drive strategic renewal." There is a paradox involving innovation that has always fascinated me: That innovation initiatives are most productive and lucrative when launched and then sustained within a stable (albeit flexible) environment. In other words, innovative thinking needs order, structure, discipline, etc. to which it can respond. There had to be a GE for Jack Welch to "blow up" when Reginald Jones selected him to become its CEO. The same was true of IBM when Lou Gerstner became its CEO. Moreover, another paradox, organizational renewal - if not transformation - requires control systems (key phrase) that are themselves innovative. In this volume, Simons focuses primarily on "the informational aspects of management control systems - the levers managers use to transmit and process inf0ormation within organizations. For the discussion to follow, I adopt the following definition of management control systems: [begin italics] management control systems are the formal, information-based routines and procedures managers use to maintain or alter patterns for organizational activities. [end italics]" More than a decade ago, Simons saw the need for a new theory of control that recognizes the need to balance competing demands. Such demands today are much more intense and in much greater numbers.

Simons suggests that an organization's strategy for control must (somehow) accommodate these "variables": belief systems which are used to inspire and direct the search for new opportunities; boundary systems which set limits of opportunity-seeking behavior; diagnostic systems which motivate, monitor, and reward achievement of specific goals; and interactive control, systems which stimulate organizational learning and the emergence of new ideas and strategies. I agree with Simons that any theory of management control must be evaluated according to criteria such as the extent to which the potentially important variables are included in the theory, the clarity of the linkage between control system variables and the achievement of organizational strategies, and the reliability and validity of the evidence. The "new theory of control" which Simons offers in this book fully accommodates such criteria.

I especially appreciate the provision of all manner of "figures" and "exhibits" which organize and illustrate clusters of key points and concept relationships that are analyzed in each chapter. These reader-friendly devices will later facilitate, indeed expedite review of Simons' key points. If reviewing nothing else in the book, busy executives should frequently check out the detailed "Checklist Summary" in Appendix A which identifies the WHAT, WHY, HOW, WHEN, and WHO of each of the four control levers and of the internal control systems which are fundamental to ensuring the integrity of data used in all control systems.

For me, some of the most valuable material is provided in Chapter 7, "The Dynamics of Controlling Strategy." Simons points out that strategic control "is not achieved through new and unique systems but through belief systems, boundary systems, diagnostic control systems, and interactive control systems working in concert to control both the implementation of intended strategies and the formation of emergent strategies. These systems provide the motivation, measurement, learning, and control that allow efficient goal achievement, creative adaptation, and profitable growth." Figure 7.3 on page 159 cleverly illustrates the dynamic relationships between and among an organization's core values, risks to be avoided, strategic uncertainties, and critical performance variables. "Managing the tension between creative innovation and predictable goal achievement is the key to profitable growth." Hence the importance of the four control levers that can enable managers to "direct collaborative enterprises toward their worthwhile goals."

Although published in 1994, this book offers even greater value today than it did then. Congratulations to Simons and on a brilliant achievement. As he explains so thoroughly and so eloquently, the extent to which innovative thinking is both productive and profitable will largely be determined by how well managers use innovative control systems to drive strategic renewal. I also highly recommend two of Simons' later works, Performance Measurement and Control Systems for Implementing Strategy and Levers of Organization Design.