Three Levels of Control

We all know that managers should not be micro-managing people. But that's easier said than done. If you notice someone's knowledge about technologies or processes is not up-to-date, should you demand that he start spending some time learning and practicing? Or if a project is late, should you require that people work late to meet the deadline?

I don't think so.

In his best-selling book Good to Great Jim Collins described how managers of really great companies use a system of constraints to align people's behaviors:

The good-to-great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility within the framework of that system. They hired self-disciplined people who didn't need to be managed, and then managed the system, not the people.

What it means is that managers should restrict themselves to setting constraints (goals and restrictions) and let employees figure out for themselves how to behave to meet those constraints. And if people are not behaving as you would have liked, then either the constraints are wrong (in which case you need to improve them), or the people don't care about the business (in which case you have a very different kind of problem).

But how do you set constraints?

While reading Managing the Design Factory, by Donald Reinertsen, I was pleasantly surprised to find his description of three levels of control events:

  1. Adjustment of System Performance (in response to a control signal)
  2. Adjustment of Control Setpoint (select desired performance level)
  3. Selection of Control System (decision how to manage performance)

The first level (adjustment of system performance) refers to the small decisions that people can make in order to satisfy a constraint, whether it is reading a book, learning a new technology, negotiating with a customer about last-minute changes, or working late to meet a deadline. Level 1 events occur frequently and therefore, as a manager, you don't want to get involved in them. Micro-management is the shortest path to disgruntled employees and overworked managers.

The second level (selection of control setpoint) refers to decisions about intended performance levels. Level 2 events occur less frequently. Examples would be: selection of required exams and certificates for technologies and processes, and specification of maximum costs, delay or overrun of projects. Selection of performance levels can sometimes be delegated to the team level, or lower-level managers. But often these control setpoints are defined somewhat higher up the management chain.

The third level (selection of the control system) refers to the selection of the types of constraints. Level 3 events occur rarely. Some examples at this level: do we aim for speed of delivery, or are low development costs more important? Are flexibility and agility crucial to our business, or are we making the most money by repeatedly doing the same things? Questions like these should result in the selection of a control system that reflects the goals and restrictions of upper management.

In his book Donald Reinertsen presented the example of the design of the Boeing 777 where low weight was one of the ultimate design goals. Reinertsen described how an innovative control system enabled Boeing designers to make their own decisions (regarding the weight of components), while still guaranteeing that the overall constraints were met. In this case upper management selected the level 3 control system, and delegated much of the level 2 control setpoints to lower levels.


The three levels of control are a welcome tool in aligning an organization. Make sure you select your controls wisely!

And when people don't behave as expected, question your constraints, not your people.

(images by flattop341 and Irargerich)

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  • David Robison

    I would be interested if you could follow up with a more concrete example of the three levels of control that might be implemented in a software development company.
    Ps. I enjoy reading you blog.

  • Dhananjay Nene

    I concur with David. While I did get a gist of the post, I think a few more specific examples might be more helpful.

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