Steve Morlidge has just finalized the second working paper on the subject of variance analysis. This topic is of particular interest to us since it is an integral part of the traditional management system we want to replace. The first paper set out the reasons why conventional approaches to performance measurement don’t work. This second paper is titled: From static to dynamic measures; understanding the patterns of behaviour. To read the paper click here.
In the Beyond Budgeting community we have a particular interest in finding better ways to measure and analyse performance. Variance analysis (‘how are we doing against plan?’) is a cornerstone of traditional management and budgeting. It is one of the reasons why budgeting is so hard to eradicate and why we need to find alternatives. If the only tool we have to analyse performance is a variance, then we have to have budgets even if we do not believe in budgeting itself. Therefore, finding better ways to measure, analyse and communicate about performance will remove a serious obstacle to the adoption of Beyond Budgeting. Accordingly, we are very grateful for Steve’s contribution to this end.
The paper is authored by Steve Morlidge who has spent most of his professional career in designing and running performance management systems in Unilever. Steve co-authored ’Future Ready: Mastering business forecasting’ (John Wiley, 2010) and has written many papers on business forecasting. Steve is the former Chairman of the BBRT.