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Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal
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.
- GenresBusinessManagement
232 pages, Hardcover
First published January 1, 1994
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October 2, 2016The book does a fantastic job of describing the levers theoretically, but doesn't do quite as much in the way of real world explanation of how to fix, manipulate or otherwise build levers that work.
That said, I was looking for a piece that was more theoretical in nature. Here are a few key points that will go into my analysis:
Definitional:
Belief Systems – what the organization has set out to do, to achieve
Boundary Systems – what an individual part of the organization must never do (ex: 10 commandments)
Concept 1:
P. 53 – “Organizational participants can view boundary systems either as either constraining or liberating… a lack of rules can be deceiving. At first, subordinates believe they have freedom of action, but they quickly learn that superiors hold them accountable to unwritten rules that can only be determined by trial and error. The result is uncertainty and a reluctance to act."
Also,
P. 54 – “If improperly set, strategic boundaries can hinder adaptation to changing product, market, technology, and environmental conditions. Boundary systems make it risky for employees to search for new opportunities ouside acceptable domains of activity. Rigid strategic boundaries make it clear to employees that using company resources to experiment in proscribed product markets is subject to discovery and punishment.”
Thoughts: These concepts point to the idea that structure is everything inspiring people to fulfill actions in a particular manner that is counter-intuitive to the concept of the ID.
Concept 2:
P. 81-83 talks about dysfunctional side effects. Diagnostic measurement systems are gamed in order to achieve incentive goals that do not meet the end organizations goals. The book then draws out a few popular types of diagnostic failure:
"Measuring the wrong variables" - Example was Sears incentivizing based on number of repairs completed. They ended up getting sued for making unnecessary repairs.
"Building slack into targets" - Purposely making targets below standards so that anything achieved about this looks like a win for managers.
"Gaming the system" - The book gives the example of a credit card company where managers were incentivized by decreasing the amount of time on a call in there department. As a result, managers would pass a caller to multiple departments instead of trying to handle the situation. Productivity numbers looked improved, but callers were not happy.
"Smoothing - altering the timing and flow of data without changing the underlying transactions being measured...."
"Biasing - transmitting only data that are perceived to be favorable..."
"Illegal acts - violation of organizational rules and/or laws
Concept 3:
Strategic planning should be interactive at the boundaries. Assuming the structure is put together correctly, strategic planning on the long range should have a lot of input from the fringe senior managers and everyone should be capable of voicing change. The Section starting P. 114 goes into great detail on how to achieve this.
That said, I was looking for a piece that was more theoretical in nature. Here are a few key points that will go into my analysis:
Definitional:
Belief Systems – what the organization has set out to do, to achieve
Boundary Systems – what an individual part of the organization must never do (ex: 10 commandments)
Concept 1:
P. 53 – “Organizational participants can view boundary systems either as either constraining or liberating… a lack of rules can be deceiving. At first, subordinates believe they have freedom of action, but they quickly learn that superiors hold them accountable to unwritten rules that can only be determined by trial and error. The result is uncertainty and a reluctance to act."
Also,
P. 54 – “If improperly set, strategic boundaries can hinder adaptation to changing product, market, technology, and environmental conditions. Boundary systems make it risky for employees to search for new opportunities ouside acceptable domains of activity. Rigid strategic boundaries make it clear to employees that using company resources to experiment in proscribed product markets is subject to discovery and punishment.”
Thoughts: These concepts point to the idea that structure is everything inspiring people to fulfill actions in a particular manner that is counter-intuitive to the concept of the ID.
Concept 2:
P. 81-83 talks about dysfunctional side effects. Diagnostic measurement systems are gamed in order to achieve incentive goals that do not meet the end organizations goals. The book then draws out a few popular types of diagnostic failure:
"Measuring the wrong variables" - Example was Sears incentivizing based on number of repairs completed. They ended up getting sued for making unnecessary repairs.
"Building slack into targets" - Purposely making targets below standards so that anything achieved about this looks like a win for managers.
"Gaming the system" - The book gives the example of a credit card company where managers were incentivized by decreasing the amount of time on a call in there department. As a result, managers would pass a caller to multiple departments instead of trying to handle the situation. Productivity numbers looked improved, but callers were not happy.
"Smoothing - altering the timing and flow of data without changing the underlying transactions being measured...."
"Biasing - transmitting only data that are perceived to be favorable..."
"Illegal acts - violation of organizational rules and/or laws
Concept 3:
Strategic planning should be interactive at the boundaries. Assuming the structure is put together correctly, strategic planning on the long range should have a lot of input from the fringe senior managers and everyone should be capable of voicing change. The Section starting P. 114 goes into great detail on how to achieve this.
January 20, 2022
Absolutely meaningless book, how it got so many positive reviews is a mystery to me.
In general the book is a superficial retelling about some control systems like measurement and rewards, mixed up with speculation and fantasies of the author.
Instead of wasting your time on this "stuff", I advise you to read other books on these topics, from Edward Lawler, Robert Kaplan etc.
In general the book is a superficial retelling about some control systems like measurement and rewards, mixed up with speculation and fantasies of the author.
Instead of wasting your time on this "stuff", I advise you to read other books on these topics, from Edward Lawler, Robert Kaplan etc.
September 27, 2021
Älskar stålmarknaden ❤️
October 13, 2021
the only book from harvard that i read
November 4, 2021
Faktiskt bra kursbok! Läsvärd!
November 17, 2025
This is my favorite book on strategic execution. Definitely written by an economist for an academic audience, but extremely insightful for business strategy design.
June 17, 2015
Definitely worth the read if you manage anything. On a practical level, it covers some important concepts (another reviewer did a fine job of summarizing the key concepts so I won't go there).
From an academic standpoint, this is one of the most important books in Management Control that I know of. Most current research in the area makes some reference to this book or the research behind it. The criticism I have seen of it is that some of the terms are too vague (e.g. interactive control) and that it focuses too heavily on senior management. That said, in my opinion the concepts would still hold for any level of management, down to the self-manager.
Also, it is well-written, flows in a logical manner, and isn't as dense as other books on the topic.
From an academic standpoint, this is one of the most important books in Management Control that I know of. Most current research in the area makes some reference to this book or the research behind it. The criticism I have seen of it is that some of the terms are too vague (e.g. interactive control) and that it focuses too heavily on senior management. That said, in my opinion the concepts would still hold for any level of management, down to the self-manager.
Also, it is well-written, flows in a logical manner, and isn't as dense as other books on the topic.
March 30, 2013
A should-read book on performance management for knowledge workers, managers, executives, and entrepreneurs.
Displaying 1 - 8 of 8 reviews