Planning Must Return to Being a Matter for Managers

What exactly is the role of the controller?

Controllers take on various functions in the planning process – from providing key figures through to reconciling business objectives. They have done their job so successfully over the years that they also play a central role in determining target values. This, however, should remain in the hands of managers. Why this represents a major challenge for controlling, and how to deal with it, is illustrated in the example of Deutsche Telekom’s Campus for Planning.

Planning has a key role in steering a company. Sophisticated processes have been developed to do this, ranging from strategic planning through medium-term planning to budgeting. One plan seamlessly leads into the next – the more interlinked they are, the better it is for the success of the company. To make it work, controllers spend around a third of their time – as we know from the WHU Controller Panel – on planning. They set the planning calendar, determine formats, provide a significant part of the information required for planning, act as critical counterpart by giving their opinions on the planning estimates, reconcile the planning estimates of the various business units, and are ultimately responsible for providing a generally accepted plan.

Managers should be proud of their controllers – after all, the complex process is generally sound and culminates in a coordinated planning each year – but more often they are not; planning is one of the processes that the management least enjoys. Jack Welch, for instance, is quoted as saying, ”Budgeting is the bane of corporate America.” Why is it that such an outstanding manager should consider budgeting to be a curse? Managers find that the planning process takes too long, is too resource intensive, and is too bureaucratic. They do not see planning as ”their” process but rather as a task for controllers, and they feel, to an extent, that it is out of their hands. They see only that part of the process that is relevant to them; it is only the controllers who have the overall picture. This gives the impression that it is ultimately the controllers who determine the objectives. Therefore, it is hardly surprising that managers feel less committed to their goals and tend to pursue a target level that is more favorable to them.

Managers are not mistaken: Controllers are more involved in supplying content than managers, as is shown by the findings of the WHU Controller Panel. Your will probably not find this in the textbooks: It is the management’s job and responsibility to specify content. And it is the controllers’ job to simply support them in doing this. 

Fig. 1 Distribution of tasks in budgeting between controllers and managers (Source: WHU Controller Panel 2013)

The fact that controllers have taken on goal-setting tasks is largely due to the complexity of the company. A wide range of business units have to be successively coordinated. Controllers can save their managers’ time by breaking down the organization’s objectives, and repeatedly testing and fine-tuning potential goals. This means that the amount of time managers spend doing this is kept to a minimum. The downside of this, as we mentioned earlier, is that managers distance themselves from the goal-setting process.    

The only way to break this cycle is for managers to get much more actively and intensively involved in setting goals. An impressive example of how to achieve this can be found in Deutsche Telekom’s Campus for Planning. The concept is revolutionary, yet simple: The company’s most senior executives assemble in Bonn for two weeks. At times, there could be up to three hundred people working on the Campus for Planning, which is signed off by the Board of Management at the end of the two weeks. There is no Plan B. Managers speak and negotiate with other managers. Controllers prepare, present, and summarize interim results, which provide input for the following day. They take responsibility for the process and its organization. Sole responsibility for the content lies with the managers.

The campus approach has fundamentally changed the planning process at Deutsche Telekom. Widespread communication has replaced silo mentality and hierarchical structures – or at least taken a huge step in that direction. The management is extremely satisfied with the new approach and have maintained this level over time. It was all made possible by the resolute committment of the Board of Management to position the Campus for Planning as a central part of their corporate culture.

Deutsche Telekom is a complex organization characterized by a great number of links between the business units. This is where the campus approach really comes into its own. However, the basic ideas can also be helpful for companies that are less intertwined. Face-to-face communication can eliminate misunderstandings, establish a common knowledge base, enable mutual learning, lead to a better understanding of each others’ situation, and create commitment to objectives that one was involved in developing. However, it also requires a robust framework to prevent it from getting out of hand. Designing such a framework is a challenging task for controllers.  But it is worth the effort: Transforming an unpopular planning process into a demanding yet fullfilling communication experience will bring controllers a significant step closer to consolidating their position as business partners. For this reason, the transformation of planning is a subject that will dominate the controlling agenda for some years to come.

Professor Utz Schäffer und Professor Jürgen Weber

Schäffer, U. (2015). "Die Entscheidungsträger sitzen sich am Tisch direkt gegenüber" (in German). In dialog with Michael Wilkens. Controlling & Management Review, 59 (Special Issue 1), 54-59. DOI: 10.1007/978-3-658-09361-7_8

Wilkens, M., & Schäffer, U. (2015, August 17). Mit dem Campus plant es sich schneller. Frankfurter Allgemeine Zeitung, 189, 16.