Why managers should work more like pilots: Management by Exception
Monitoring increasingly complex processes and managing the flood of information and data resulting from the growing digitization of these processes often requires a high level of expertise, time, and attention from management. As a result, valuable resources are wasted that could be better utilized in other areas. The risk of errors also increases. By using real-time monitoring systems and data-driven alerts, such as chatbots, production processes can be automated, requiring managerial intervention only when certain thresholds are exceeded or not met. This allows employees to work independently and without interruptions, while giving the manager more capacity to focus on critical operational issues. This leadership style, also known as “Management by Exception,” is applicable in many industries and areas and can be compared to the way pilots operate, as they only take control when there is a problem or a particularly critical phase of the flight, such as takeoff or landing. During the rest of the flight, they can focus on external or “big-picture” factors such as weather, flight route, or communication.
In our last webinar, our consultants Richard Ranftl and Milad Rahimi-Barfeh discussed this management technique and explained the exact process and benefits of this management method using examples and use cases.
Industry 4.0 is leading to the increasing digitalization and automation of process structures in companies and management areas in order to create a more flexible, transparent, and efficient workflow. However, this also means that managers are faced with an unprecedented amount of data and information that they need to keep track of. This can lead to overwhelm and mistakes. With the management by exception method, not only the new requirements can be met and measures for targeted problems can be derived quickly, it also provides managers with the necessary overview and the confidence to recognize and solve any problem conditions. Furthermore, with the time saved, executives can shift their focus to other important tasks, reduce error rates, and often make processes more efficient through data-driven alerts, saving the company time and money. Also, for employees, Management by Exception offers advantages: due to the reduced interventions of management in work processes, they enjoy more freedom and independence in their daily work, which can, in return, lead to increased motivation and job satisfaction.
But how do data-driven alerts work?
In order to be able to use data-driven alerts effectively, a high-performance data integration and real-time data transmission is necessary. Live data from one or more source systems is uploaded in real time to target systems such as Qlik Sense. The customer can then view this live data directly in a customized dashboard. By setting up additional alerts, a push notification is sent to the responsible person, for example in Teams, when key performance indicators (KPIs) fall below or exceed relevant thresholds. They can then take further actions as needed. This method is applicable to many different systems and scenarios, from production to distribution, and usually requires little effort to implement. Additionally, triggered by alerts, custom processes and tasks can be automated. For example, in sales, an alert can be triggered when a customer hasn’t been visited for 4 months, and as a result, an automated task can be created for the responsible sales representative in the CRM to visit that customer. By taking immediate action when certain threshold values are exceeded or not reached, the reaction time can be significantly improved and the work can be done more efficiently.
The versatile application, quick implementation, short payback period, and significant efficiency improvement make data-driven alerts and the associated management method of Management by Exception a future-proof strategy for any company. As a tool- and industry-independent consulting firm, H&Z.digital GmbH offers effective and efficient digital solutions for every process and supports you from requirements analysis to implementation and maintenance.
If you have any further questions or suggestions on the subject of Management by Exception or Alerts, please contact us at any time at info@hz.digital.
