Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 1
One page only –
Reports for decision makers.
Controllerverein.com
this way.
ICV work group Szczecin 2011-09-09
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 2
One page only –
Reports for decision makers
.
Controllerverein.com
ICV work group Szczecin 2011-09-09
or that way ?
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 3
„What’s not to summerize
on only one page,
is neither well thought off or
well prepared for decisions."___________________
Dwight D. Eisenhower
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 4
Independent consultant focusing on:
Implementation of Balanced Scorecard incompanies
Workshops on Balanced Scorecard
Internationaler Controller Verein eV
head of the PR committee at ICV
Visiting lecturer at Humboldt University in Berlin andDanube University Krems (A)
Hobbies: discovering the New, travels, bicycle tours, enjoying the nature, volleyball, sailing
Herwig R. Friedag
Dr. Herwig R. FriedagFriedag Consult
Beskidenstr. 33, D 14129 Berlin
Fon +49 30 80 40 40 00
Fax +49 30 80 40 40 01
consult @ friedag.com
www.friedag.com
Born in1950, Dipl. Volkswirt, Dr. rer.pol.
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 5© Friedag / Schmidt 2011 5
One page only
01 Ideas for good reporting
02 Customer’s data requirements
03 OPO examples
04 Graphics or numbers?
ICV work group Szczecin 2011-09-09
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 6
Sense and aim of reporting is:
o creating transparency,
o generating management-relevant data
o preparing and providing every user
with management-relevant data
to make a goal-oriented decision within the company management
Report’s tasks
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 7
Reporting should be oriented on data requirements of every single
report’s recipient .
A compact, understandable and meaningful reporting system is here
a condition for acceptance and application on all recipients.
Sense of reporting
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 8
Depending on time period, reports can be prepared e.g.
daily, weekly, monthly, quarterly or annually.
They list the current data and vizualize and comment
the differences from earlier periods / plans.
Frequency of a report
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 9
In particular for controller, the reporting is an important tool for
planing and coordination, because the numbers and analysis of the
past influence significantly the decisons about the future.
Therefore the transparency regarding finances is crucial for the
results and the strategy process.
Report’s content
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 10
Besides: each report costs money: costs of
- obtaining data,
- data processing and
- time for reading / understanding
Ask more often: How much does this report cost?
Is it worth it?
Report’s costs
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 11
No more than 7 information units for the recipient
Why7 ?
The reason could be the importance of seven in people perception.
It origins from the field of cognitive psychology. Seven is called
Miller’s magical number seven.
Already more than three hundred years ago John Locke
discovered so called „seven phenomena“ when he studied
inteligence of an adult. He claimed that the test people (seeing
many object for a short moment) have the score of almost one
hundred percent, if the number of objects is lower than seven. By
more than seven objects is the score much lower.4)
4) Z. Giora: The Magical Number Seven. In: D. Robert (Hrsg.): Occident and Orient-
Budapest 1988. S. 175 ff.
from: http://de.wikipedia.org/wiki/Sieben
Reporting requirements
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 12
Our short-time memory
Why7 ?
The Miller’s magical number seven describes the fact discovered by
George A. Miller: one person can simultaneously keep only 7±2 information
units (Chunks) in mind for a short time. The size of short-time memory is
determined genetically and cannot be improved by „training”. 1)
1) http://de.wikipedia.org/wiki/Millersche_Zahl
Reporting requirements
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 13
Quantities clear for people
functioning in practice 1)
Methods to handle with complex systems (see Fredmund Malik,
requirements management, software engineering) aim in breaking the
data into transparent units. The border of transparency is reached by
seven system elements.
Therefore different effects and recommendations can be explained:
Hierarchies are ineffective, when more than 7 co workers in the same
field have one superior.
When you pursue more than 7 goals simultaneously, you can loose the
overview.
Discussions with more than 7 participants are not so effective.
The structure of a document should not have more than 7 sub-headings.
A website should have maximal 7 menu items.
1) http://de.wikipedia.org/wiki/Millersche_Zahl
Reporting requirements
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 14
No more than 7 information units for the recipient
An information unit can also consist of information pairs
(e.g. strategic – operative, Input - Output)
Reporting requirements
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 15
How should the information units work? (coherence = consistency)
Reports must be
a) understandable,
b) manageable and
c) important
Provide only data, which are also
a) understandable for the recipient,
b) for which he’s responsible and
c) where he is capable of making decisions.
Reporting coherence
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 16
Indicators / Reports must be consistent
(= understandable, manageable and important)
How can you recognize it?
Set of examples:
a) understandable, - not understandable
b) manageable - not manageable and
c) important - not important
Exercise: Reporting coherence
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 17
Not too high complexity of data to get definite and clear results.
Requirements of the user: short and understandable: 7
always clear database
good communication basis thanks to clear
massages
(What should the site/ graphic reveal?)
quick analysis and decision time
Controllers’ responsibility:
He makes an initial selection of data included in the report.
He must check on the basis of his behaviour if the recipient has received / did
understand the massage .
He must dig deeper if it’s needed (Deyhle: „liebenswürdige Penetranz“)
Conclusion
01 Ideas for good reporting
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 18© Friedag / Schmidt 2011 18
One page only
01 Ideas for good reporting
02 Customer’s data requirements
03 OPO examples
04 Graphics or numbers?
ICV work group Szczecin 2011-09-09
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 19
Who is the controller’s customer?
02 Customer’s data requirements
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 20
Manager und Controller
02 Customer’s data requirements
Manager:
responsible for
business results,
finance,
processes and
strategy
Controller:
responsible for
business results,
finance,
processes and
strategy
transparency
Co
ntr
oll
ing
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 21
For every report it should be cleared, which recipient which
reports and data - when and really regular ? - needs and in
which aggregation the data should be provided.
The controller must know which decisions the recipient can make
on the basis of his reports
Perception of his responsibility
Being manager’s partner
Who’s the customer?
02 Customer’s data requirements
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 22
What wants, what „should” know the customer?
02 Customer’s data requirements
Which decisions are part of his responsibility?
transparent responsibilities
What is needed periodically (monthly, quarterly)?
not more than 7 parameters (or their pairs)
Parameters cost money
what is the customer able to pay?
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 23
Reports are not common statements –
that’s why it must be established with the
responsible manager before:
a plan (budget) with numbers
range for the goals
frequency of the statements as a basis for
decisions
Planning und data requirements
02 Customer’s data requirements
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 24
Strategic, operative and dispositive data – according to the
business model:
Strategic = develop: what potentials do we want to establish?
Operative = use: what do we want to achieve?
Dispositive = apply: what is the time order of potentials?
What data is important?
02 Customer’s data requirements
develop
use
strategic
operativ
apply
dispositive
necessary
potentialsavailable
potentialsneed for
development
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 25
spending money
cash inflowpotential inflow
develop exploit
orders / contract
use capacities
quality assurance
staff development
liquidity
partner’s disposition
marketing
develop capacities
quality potential
staff competence
investor relations
Partnership
strategic operative
potentialspossibilities
+skills
Exkurs: What is strategic, what is operative ?
do?do nothing?
long-term ? short-term ?
02 Customer’s data requirements
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 26
Strategic and operativ, optionally also dispositive data –
according to the business modell
Problem:
which goals could not be achieved / were even exceeded and why?
What measures will be taken - by whom responsible and until when
– to solve the problems?
Where is there need for decisions?
What data is important?
02 Customer’s data requirements
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 27
It depends on the resposibility of the manager
What is important for the manager, must be talked over with him
What data is important for a single manager?
02 Customer’s data requirements
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 28
Month reporting:
plan
actual
differences absolutely or
differences %
plan end of the year
forecast the end of the year
differences absolutely or
differences %
… and everything on one page? What can we reduce?
Exercise: a reasonable column layout
02 Customer’s data requirements
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 29
For every responsible manager usually only one report –
only one page with max. 7 information units (or their pairs)
Further analysis for demand
A report contains one page if possible
planned- and actual figures (as numbers or graphics)
Hints for deflections
Means to achieve the goal
need for decisions
What results from all this for controlling?
02 Customer’s data requirements
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 30© Friedag / Schmidt 2011 30
One page only
01 Ideas for good reporting
02 Customer’s data requirements
03 OPO examples
04 Graphics or numbers?
ICV work group Szczecin 2011-09-09
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 31
OPO – recommended structure
03 OPO examples
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 32
OPO examples: a football club
03 OPO examples
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 33
OPO examples: ICV-Public Relations
03 OPO examples
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 34
OPO examples: food industry
03 OPO examples
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 35
03 OPO examples
OPO examples: home unit company
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 36© Friedag / Schmidt 2011 36
One page only
01 Ideas for good reporting
02 Customer’s data requirements
03 OPO examples
04 Graphics or numbers?
ICV work group Szczecin 2011-09-09
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 37
Graphics or numbers
It is essential for reporting to provide homogeneous and binding
terminology: the same terms are important also when they appear
in different places. Different terms should be designated on a
different way.
Creating a homogeneous companies glossary is an important task
for a controller.
E.g. Hichert shows, how graphics should be constructed.
http://www.hichert.com
04 Graphics or numbers?
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 38
Graphics or numbers
Quelle: http://www.op-inside.de/page31/page6/assets/OP-Cockpit.swf
04 Graphics or numbers?
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 39
Graphics or numbers
source: http://www.hichert.com/downloads/consulting/schaubilder/044_798.pdf
04 Graphics or numbers?
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 40
Graphics or numbers
Source: http://www.hichert.com/de/consulting/schaubilder/310
04 Graphics or numbers?
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 41
…
What is better for whom?
04 Graphics or numbers?
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 42
More information:
http://isc.hs-heilbronn.de/Tools_Excel/ICV/ICV_15/opo_tool.pdf
http://www.hichert.com
04 Graphics or numbers?
Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 43
Exercise: choosing a target customer - game
(employee / company)
company data
area of responsiblity
personality profile
Practical group work
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