Counterflow method in controlling
The balance between bottom-up and top-down
The best of both worlds - the counterflow method for balanced corporate management
The counterflow method is a method of corporate planning. It combines elements from strategic top-down planning with those from practical bottom-up planning. The aim is to align strategic guidelines with the practical findings from the operational levels. The counter-current method is therefore used to find a balance between strategic guidelines and operational feasibility.
How the counterflow method works
The counter-current method begins with a strategic top-down specification: the company management sets rough targets and framework conditions. These guidelines are then passed on to the lower hierarchical levels. A bottom-up adjustment takes place there, in which the realistic opportunities and challenges from operational practice are incorporated. This feedback is in turn reviewed at higher levels and integrated into the overall planning if necessary. This creates an iterative process in which strategic and operational planning are aligned.
Advantages of the counterflow method
- High level of realism: The consideration of operational findings ensures realistic goals.
- Increased acceptance: Employees are involved in the planning and are more motivated to implement the goals.
- Employee loyalty: Thanks to the active involvement of employees, they can identify better with the goals and the company. This also increases employee satisfaction.
- Flexibility: The combination of strategic guidelines and practical implementation enables adaptable planning.
- Improved communication: Constant communication between management and employees reduces misunderstandings.
Disadvantages of the counterflow method
- Time-consuming: The iterative alignment process can take more time than pure top-down or bottom-up planning.
- Complexity: Multiple customization requires a high degree of coordination.
- Potential for conflict: Differing interests of management and employees can lead to tensions.
Findings from studies on the counterflow method
According to a study by the CA Controller Academy, over 60% of German-speaking companies use the counterflow method in their planning. These companies report better target achievement and higher employee motivation.
Another study by the International Group of Controlling (IGC) shows that companies that use the counterflow method can react more agilely to market changes. Particularly in highly fluctuating markets, this method enables faster adaptation of planning to new circumstances.
Important aspects of the counterflow method for controlling
Controlling is the right hand of management. Controllers have a central mediating role. Their task is to make a valuable contribution to the optimization of company processes by continuously monitoring and controlling the countercurrent comparison of target and actual data. To ensure that the counterflow method can be successfully implemented in the company, controlling should take a few key points into account:
- Coordination and communication: Controlling acts as an intermediary between management and operational units and ensures an effective flow of information.
- Flexibility and adaptability: As the counterflow process is iterative, controlling must be able to modify plans quickly if necessary.
- Transparency: A clear planning process and regular coordination increase understanding and acceptance at all levels.
- Training and qualifications: Controllers and other stakeholders should have the necessary knowledge and expertise to design the process efficiently.
Checklist for controllers for the practical implementation of the counterflow method
- Analyze strategic objectives: Are the specified corporate objectives realistic and clearly formulated?
- Ensure communication: Are there regular meetings between management and operational units?
- Operational feedback: Are employees' suggestions and concerns systematically recorded?
- Check planning adjustments: Is the iterative coordination process organized efficiently?
- Ensure flexibility: Are adjustment options provided for in order to be able to react to market changes?
- Define success measurement: Are there key figures to evaluate the success of the planning?
- Organize training: Are all those involved sufficiently trained to optimally implement the counterflow procedure?
- Ensure transparency: Is the entire planning process documented in a clear and comprehensible way?
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