Management SummaryStern Stewart Research // Volume 52

It is not just since the financial and banking crisis of 2008 that market environments have been changing ever more quickly – driven by high levels of public debt in Europe, the crisis of financial and capital markets is once again spilling over into the real economy. Optimism and growth ambitions are increasingly giving way to uncertainty about the economic outlook and the associated caution regarding growth and investment intentions. Liquidity and costs are once again becoming focus areas for management.

Management responds to the volatile alternation of crises and upturns with major projects and programs aimed at enhancing flexibility and strength. However, the typical line organization of most companies is not prepared for this fast-paced change. The financial results of these programs therefore do not always meet expectations. Effective program controlling can prevent such shortfalls. We have identified seven principles that guide the establishment and firm rooting of effective program controlling within an organization.

1. Define specific and measurable goals for each subproject 2. Develop action plans with tangible, measurable milestones 3. Measure performance vs. targets on at least three levels 4. Set dynamic targets 5. Retain knowledge and ensure neutrality 6. Use consistent data based on a program-wide software tool 7. Integrate program controlling into standard processes