The adaptive management model
On 9 December, around 40 delegates participated in a local Beyond Budgeting workshop in Göteborg organized by our Swedish partner Ekan Management.
The workshop included presentations from Handelsbanken and Akademiska Hus, who both elaborated on their Beyond Budgeting experience. Ekan Management rounded off the workshop highlighting the need for developing dynamic financial processes.
We would like to thank Handelsbanken for hosting the event.
Earlier this week, BBRT chairman Bjarte Bogsnes, wrote a great article which was published in Norway’s main business newspaper. The occasion was the annual celebration of the country’s fastest-growing companies; the so-called gazelle companies.
In the article, Bjarte highlights the desire of these companies to continue their growth and development. As small companies grow they tend to be inspired by how larger organisations are managed; they copy their systems and processes which includes an impressive and spectacular list: strategy development, business planning, budgeting, risk management, KPI systems, performance management processes, rewards systems, etc.
All of these systems and processes are all there for the right reasons: to improve the companies’ performance. However, experience shows that they very often have the opposite effect: they turn the once-agile companies into slow, rigid and bureaucratic organisations… and sometimes even into sad places to work.
The good news is that it doesn’t have to be like this. It is stated nowhere that companies must adopt all the bad habits of larger ones; and this is where Beyond Budgeting provides an alternative that enables fast-growing companies to maintain their agility and employee engagement leading that leads them to further performance improvement.
The above is a quote from Deutsche Bank’s new co-chief executive John Cryan which led to several articles in business papers this week; most notably in Financial Times. Hopefully, this will contribute to an increased understanding and belief that individual bonuses lead to poorer organizational performance.
The editor’s letter in yesterday’s FT – see below – includes a great example: It notes that the period during which banking wages were at the very highest, not least due to lucrative individual bonuses, neatly corresponds to the years when shareholder returns were at the worst.
Did you ever wonder why companies on average make significant changes to their individual bonus schemes every second year? It is not a ‘continuous improvement’ effort… it is because they fundamentally do not work as intended.
We wonder how long it will take for shareholders to wake up and stop this value-destructing practice of individual bonuses.
Reference is also made to our most recent newsletter about: The Bonus Paradox – or: Why don’t we fire HR?
Financial Times, 26 November 2015
On 23 October, Knut Fahlén at Ekan Management (our local Beyond Budgeting Partner in Sweden) attended a packed breakfast meeting on the theme Beyond Budgeting. The organizer of the event was the West Swedish Chamber of Commerce.
Knut began by describing the budget’s origin including the conditions in the business environment, market and organizations. He then went over in today’s highly uncertain and changing reality to highlight why the traditional budgetary control has played out its role – “What many companies are looking for today is a more dynamic management model, which provides the opportunity to better adapt to the outside World.” The audience also agreed on the fact that the budget is a time consuming process. One of the delegates expressed his viewpoint: “We spend 40 percent of our time on the budget, and it is outdated all the time.” Someone else expressed the difficulty of changing such a strong institution budget process in their organization.
Several questions dealt with how to proceed in order to develop its business in the director of the Beyond Budgeting Framework. In that connection, Knut emphasized that Beyond Budgeting is not a recipe that each organization must follow. However, there are many tools and experiences to help you out in the process.
The Beyond Budgeting Institute has produced a short video that explains what Beyond Budgeting is all about. Among other things, Members of the BBRT Core Team reveal why there is a need for transformation in order to bring management to the next level and align it with the present and the future.
On October 28th our BBRT partners in Iceland, Beyond ehf., hosted the first annual Manino Finance conference in Reykjavík. The conference’s theme was Finance’s role in implementing Beyond Budgeting and Lean with focus on rolling forecasts and lean accounting.
Steve Player, BBRT’s North America program director introduced a holistic view on the Beyond Budgeting model and discussed how business forecasting can be used to improve decision making.
Bjarte Bogsnes, Chairman of the Beyond Budgeting Round Table, presented the BB model at Statoil and how KPI’s are best used in a BB setting.
Jean Cunningham, a widely recognized pioneer of Lean Business Management, introduced Lean accounting and compared standard costing to the value stream approach in financial reporting.
Around 80 people participated and the organizers received much positive feedback on the subjects and presenters at the conference.
On 3 November, we held an open Beyond Budgeting conference in London.
The event featured interesting, thought-provoking and insightful presentations from thought-leaders and practitioners.
The event demonstrated that the Beyond Budgeting philosophy represents a holistic and coherent management model. The model is completely in line with Handelsbanken’s way of working which has been successfully applied for more than 40 years. At the same time, it is in line with advanced Systems Thinking, and even ready for what lies ahead; the latter referred to by LBS professor Julian Birkinshaw as: Adhocracy.
Thanks to all the great speakers, and to Happy for hosting the event.
Some 60 BBRT Members enjoyed interesting and thought-provoking days of listening and debating at the last BBRT Members’ Meeting, which this time took place at Schneider Electric’s Headquarter in Paris.
We were very fortunate to receive input from the following speakers:
In the afternoon, we had a parallel French session for about 25 people interested in the Beyond Budgeting Principles – a great afternoon with knowledge sharing and interesting presentations from Isaac Getz, Jean-Michel Segui from Schneider Electric and Mehdi Berrada from Groupe Poult.
We would like to give thanks to all the speakers and Schneider Electric for hosting the event.
The next Members’ Meeting will take place on 17 March 2016 in London.
Are you interested in learning how to break free from the annual performance trap and create the right conditions for great performance to take place?
Join us in London in November at the Open Beyond Budgeting Conference and Beyond Budgeting Masterclass. An exceptional opportunity to learn from inspiring thought leaders and practitioners.
Learn how to abandon traditional ‘command-and-control’ and implement a management model that is more empowered and agile. At the conference, you can meet:
In order to sign up, please click here.
Take part in one day intensive training in methods and tools for practical implementation of the Beyond Budgeting Principles based on strong case stories.
Anders Olesen, Director of the Beyond Budgeting Institute, will explain and illustrate how to develop and implement management models that lead to lean, adaptive and ethical enterprises that can sustain superior competitive performance.
In order to sign up, please click here.
We are excited to announce that we have entered into agreement with Kurt Salmon – a global management consulting firm – to represent us in France. Kurt Salmon has several service lines including: CFO Advisory, Human Resources Management, Strategy etc. They have considerable advisory experience within Performance Management and Beyond Budgeting related issues. In France, they have offices in Paris, Lyon and Nantes.
We look very much forward to our cooperation with Kurt Salmon, who will be well represented at our events in Paris next week.
It is with great sadness that I have to inform you that BBRT co-founder, Peter Bunce, passed away on Friday, 21 August at the age of 68. Our thoughts are with his wife and family at this time.
As some of you will already know, Peter was diagnosed with cancer in late 2013 and, demonstrating great fortitude and a positive spirit, he had subsequently undergone numerous treatments. Sadly, none of these had the desired effect.
Peter had been looking so much forward to spend his well-deserved retirement together with his wife, Sarah, their children and grandchildren. Very sadly, he did not live to experience this.
As one of three founders, Peter played a key role in establishing the BBRT in 1998, and in its development since then. All through this time, Peter was incredibly committed to the BBRT, and he remained a member of the BBRT Core Team until his death. Together with co-founders Jeremy Hope and Robin Fraser, he has left a legacy through his role in articulating more humane and effective ways to manage organizations.
Peter was an inspirational leader of our network, a dear friend, colleague and mentor to many. He will be greatly missed.
Two years ago, Peter decided to gradually step out of his day-to-day responsibilities in the network. This transition has been very successful, not least due to his positive spirit and strong wish to see the BBRT continue its positive development. Peter leaves us at a time where we have our largest membership base, many implementations underway, and exciting plans for the future; plans that he would have liked to see materialize.
Peter put so much of himself into the BBRT. We all owe him a big debt of gratitude.
If you wish to send condolences to his family, you are welcome to direct them to me and I will make sure to pass them on. Peter’s Thanks Giving service is held at St Thomas Church in Lymington on Thursday, 3 September at 2.00 pm.
Instead of flowers, people are welcome to donate a token amount to Oakhaven Hospice where Peter spent his last weeks. For more information, please click here.
Anders Olesen
On behalf of the BBRT Core Team
The budget remains the central framework by which organisations set targets and allocate resources despite the fact that most leaders know that the budgeting process causes significant problems.
In August’s edition of ‘Strategically Speaking’, issued by the international consultancy Palladium, Anders Olesen and Bjarte Bogsnes share their viewpoints when asked the question: “Is the budgeting process still fit for purpose?”
You can read the article here.
Rikard Olsson from Ekan Management (our Beyond Budgeting Partner in Sweden) inspired CFO’s from across Europe on the theme “Beyond Budgeting – is it for real now?”. Speakers from Maersk Line, Weight Watchers, Nors, 20th Century Fox and others all confirmed that the role of the Finance function, methods and tools used for accounting control is changing fundamentally. In times of uncertainty and increased market complexity it becomes apparent that the traditional budgetary control is obsolete and that Beyond Budgeting has become an established way to meet the changes. Ekan Management is proud to be awarded “best presentation” at the conference and look forward to more interest from companies all over Europe.
Franz Röösli, member of the Beyond Budgeting Institute’s Core Team, has written the article ‘Management Plasticity’ in cooperation with Doug Kirkpatrick (Morning Star) and Mike Sonntag (MD), who are both part of our Beyond Budgeting Network.
‘Management Plasticity’ is a new interesting term defined by the authors. The term refers to the article’s conclusion that to unfold human potential and creativity, organizations must transform the traditional management mode of ‘predict and control’ into a new mode of ‘sense and respond’.
You can read the article here.
On 27 May, the first ever Beyond Budgeting conference was held in Reykjavik, Iceland. About 130 leaders from Iceland’s leading businesses attended the conference; this is a great sign of a very promising interest in Beyond Budgeting. Several Icelandic companies have already started their Beyond Budgeting journey, and based on the interest we see now, there is no doubt that many more will follow. The conference was very well organized by our recently appointed local partner: Beyond ehf. represented by Petur Arason and Axel Guðni Úlfarsson (pictured below).
Last year, we started to organize local workshops for our BBRT members. These events are coordinated by our local partners and have proven extremely popular.
In the beginning of May workshops were held in Denmark and in Norway. At both events, BBRT members shared valuable implementation experiences. We also discussed how to manage costs without traditional budgets and in Norway, the program included a great example of a large insurer that has successfully abandoned its bonus programs.
Last week, the local BBRT workshop took place in Sweden at Volvo Cars in Gothenburg. This too was a great day packed with great cases from Volvo Cars, Nors and Spotify.
You can also be a part of our local workshops. Become a member of the BBRT and learn how to break free from the annual performance trap.
In the beginning of April, BBRT chairman Bjarte Bogsnes and director Anders Olesen attended a number of meetings and workshops in Paris. All these events were about introducing the Beyond Budgeting principles and management model to French companies.
In total, Anders and Bjarte met with some 250-300 people, most of who represented some of the largest industrial and financial companies in France.
One of the events was a joint session with Schneider Electric that successfully implemented Beyond Budgeting more than 10 years ago.
We are very excited about this interest. We will follow this closely and do our best to support the initiatives taken in France. Moreover, as mentioned at the latest BBRT Members’ meeting in London last month: it is very likely that the next European BBRT meeting is held in France.
Last week the first Members’ Meeting in 2015 took place in London. The meeting was preceded by the Implementers’ Meeting facilitated by Steve Morlidge, former BBRT Chairman with more than 30 years of practical experience in designing and running performance management systems at Unilever. The meeting explored the subject “Targets and target setting” and provided advice to active implementers.
The BBRT Members included three main themes. Frederic Laloux revealed the key findings of his three years groundbreaking research presented in the book “Reinventing Organizations”. During his presentation, Frederic elaborated on some very interesting patterns pointing towards a new emerging organizational model leading to more purposeful and better performing organizations.
At the meeting some BBRT Members also shared their varied Beyond Budgeting experiences.
During the last three years Uno-X has created a number of significant changes to their management model and organization resulting in improved profitability, cost efficiency, customer satisfaction and overall competitiveness. Henrik Esberg, the CFO of Uno-X Automat explained in his presentation how they have benefited from applying the Reitan culture and the Beyond Budgeting principles – a great example of the unleashing of performance potential that can follow when an organization is given autonomy.
Furthermore, DNV GL shared their experiences with the implementation of Beyond Budgeting processes into a large global organization that has been around for a long time.
All presentations from the meeting will soon be available on the BBRT Members’ Community.
We are looking forward to welcoming you in October at the next BBRT Members’ Meeting.
Today Denmark’s largest business paper, Børsen, brought a great article about BBRT Member Arla. The article describes how Arla manages without budgets in order to move beyond command and control with the purpose of releasing their employees from the burdens of stifling bureaucracy and suffocating control systems, trusting them with information and giving them time to think, reflect, share, learn and improve.
You can read the article here. Please note that the article is in Danish.
The next local BBRT Members’ workshop in Denmark is hosted by Arla, who at this occasion will elaborate on their model for rolling forecasting.
In order to reach out to as many organisations as possible, we seek to build a global network of Beyond Budgeting Partners. The role of the partner is to promote the Beyond Budgeting Principles locally and organise local Beyond Budgeting events. In addition, the partner shall assist locally based organisations on their Beyond Budgeting journeys.
It is a great pleasure to inform you that we have entered into an agreement with Beyond ehf. to represent us in Iceland. Beyond ehf. is a newly established company owned by two of our old friends from the Beyond Budgeting network: Axel Guðni Úlfarsson (Össur) and Petúr Arason (Marel).
Their first major activity is an open conference taking place on 27 May in Reykjavik. Bjarte Bogsnes and Anders Olesen from the Beyond Budgeting Institute will attend the conference, which will also include an interesting presentation about the Maersk Group’s Beyond Budgeting journey.
This month, the ICAEW (Institute of Chartered Accountants in England and Wales) is publishing a Special Report on Budgeting. The report includes articles on different aspects of budgeting from various experts.
The Beyond Budgeting Institute is very happy to have contributed to the report with an article representing the Beyond Budgeting approach including case studies.
This article was first published in the special report “Budgeting”. The faculty helps accountants in business to perform at their best. For more information on the benefits of membership see icaew.com/fmjoin
We are very excited about the next European BBRT Members’ Meeting in London.
The meeting on 12 March will include very interesting insights into emerging organizational models that lead to more purposeful and better performing organizations.
In addition, BBRT Members will share their varied Beyond Budgeting experiences, including:
The Members’ meeting is preceded by the Implementers’ Meeting on 11 March. The theme of this meeting is “Targets and target setting”.
Happy New Year!
We wish all our network and everyone else interested in Beyond Budgeting a Happy New Year.
Did you notice that Beyond Budgeting was recently quoted in Financial Times shortly before year-end? Our chairman, Bjarte Bogsnes, was interviewed by the Financial Times and we are very happy that this later led to a short article in FT.
Click here to read the article. Please, notice that you need to sign in to read it. You can register here.
BBRT member Velux is one of the strongest brands in the building industry due to their world famous roof windows and skylights. Velux has developed a new planning model which has improved transparency and their ability to act on demand changes globally.
The largest business paper in Denmark, Børsen, brought a great article about Velux and their new model. Here is a link to the article. Please, note that the article is in Danish.
The next local BBRT Members’ workshop in Denmark is hosted by Ulrich Gammelgaard from Velux, who at this occasion will present their new model.
The first local Swedish BBRT Members’ Meeting was organized by Ekan Management on 10 December. The meeting attracted over 40 participants from more than 15 large and medium-size companies.
The meeting was very appreciated, where the host for the meeting, SKF, first invited to lunch and gave a guided tour through the history of SKF. After an introduction by Henrik Lange, CFO SKF, Dag Larsson and Rikard Olsson, Ekan Management, gave an introduction to Beyond Budgeting and the BBRT network in Sweden, Europe and the Global Network. Bjarte Bogsnes, VP Performance Management Development at Statoil, presented the Statoil journey and answered to questions on their experiences and recommendations.
Ekan Management, BBRT’s local Beyond Budgeting Institute representative in Sweden, will give the Swedish BBRT members the opportunity to attend the next local meeting on 19 May.
Knut Fahlén, Ekan Management, facilitated a workshop the theme “How can we manage easier and smarter”. The Beyond Budgeting principles concerning the process of planning and controls was presented for over 100 managers at a medium-sized municipal in Sweden.
Several questions was addressed, and especially the purpose and relevance of the Budget, as defined in The Swedish Local Government Act, when it comes to management and performance. Is the 31 December a relevant dead-line for all the different purposes, operations and activities in any municipal, or can we learn something from successful companies like Aviva, managing their services Beyond Budgeting?
At the Budgeting days, organized by KEF (The association for municipal finance professionals), Knut Fahlén at Ekan Management facilitated a half-day inspirational lecture about Beyond Budgeting. There are several indications, not only in the private sector but also in the public sector, concluding that the classical command and control management promoted by budgets are not working in the public sector today. Maybe for allocation of resources and tax-purposes, but not for managing the business they are in.
A common remark from finance people in the public sector is that the budget is regulated in The Swedish Local Government Act, or The Swedish Budget Act relevant for the parliament. The purposes of these laws, or equivalent in other countries, are however mainly to match income taxes against spending on a yearly basis, not how to manage the variety of business concerned. The message to the audience focused on the need to separate the budgeting process. When forecasting, target setting and resource allocation are made in one process instead of separated, there will be nothing to manage against. It’s the gap that’s interesting.
Bjarte Bogsnes, BBRT chairman, was among many great speakers at the Management Innovation eXchange conference (the MIX) in New York in November.
In connection with his presentation, Bjarte has contributed with some very interesting viewpoints explaining that many leaders live under the illusion that performance can and should be measured in simple, mechanical and objective ways. According to Bjarte, that is not possible. There will always be subjectivity, whether we like it or not.
You can read the article here.
Henry Stewart, one of the speakers at our last BBRT Members’ Meeting and the open conference in London, was recently featured in the Financial Times (Nov 23rd). In the article, Henry Stewart elaborates on the proven link between happiness and productivity and why the creation of employee happiness should be on the managers to-do list. However, he also admits that most companies are not ready for such a radical culture change.
Happy’s business philosophy and the Beyond Budgeting principles complement each other very well. According to Henry: “People work best when they feel good about themselves. So the main principle of management should be making people feel good“. Our mission at BBRT is to help organisations achieve sustained, superior performance, and an important prerequisite is employee engagement.
Please, click here to read the article.
Ekan Management, our local Beyond Budgeting Institute representative in Sweden, is organising a workshop on 10 December in Göteborg, Sweden. Non-members are able to participate free of charge in order to learn more about the network and the Beyond Budgeting principles.
For more information and registration, please click here.
Miles, a Norwegian IT consulting firm, is a great example of how organisations can break free from the annual budget trap once and for all and still be highly successful.
Growth targets, revenue and budgets are all unfamiliar financial concepts at Miles. Instead their vision is to create and develop a professional and social environment that attracts the most skilled and talented employees in their industry. The formula for success originates from their recruitment process and working environment philosophy based on “freedom with responsibility”.
If you are interested in learning more about Miles, click here. Please, note that the article is in Norwegian.
This week the Management Innovation eXchange (the MIX) held a great conference in New York. Bjarte Bogsnes, our chairman, was among the many great speakers that also included Gary Hamel and Vineet Nayar who kicked it all off on Tuesday afternoon.
If you are interested in following the latest and greatest ideas about leadership and management, then we encourage you to also have a look at the MIX network – see http://www.managementexchange.com/. Headed by Gary Hamel, they are amazing at collecting, sharing and nurturing great and very often thought provoking management ideas in the pursuit of management models that make organizations fit for the future – and fit for human beings.
In the Beyond Budgeting Institute we do our best to help our members learn from these – and other – sources, and to translate the ideas into new practical processes that can improve performance in a sustainable way. We are very happy to cooperate with and contribute to the MIX – please, click here for an example.
Below are, but a few of the many, insights from the conference:
If you are more interested in the learnings from the MIX Mashup, go to: http://mixmashup.org/ or contact Anders Olesen and I’ll do my best to share with you.
A great thanks to Polly, Gary, Michele and their crew for hosting this great event!
Denmark’s largest company, A.P. Moller – Maersk, has recently posted an impressive profit of US$1.2b in Q3 2014. This impressive figure is a result of “a forward-looking strategy, intelligent capital allocation and an improved performance management process,” says CFO Trond Westlie, who has offered an insight into his rules for success – rules that are consistent with the Beyond Budgeting principles. A.P. Moller – Maersk is also a member of the BBRT. To learn more, please click here.
For a more thorough interview with Trond Westlie, please click here.
To read a short case story about A.P. Moller Maersk’s management and planning processes written by Anders Olesen, Director of Beyond Budgeting Institute, please click here.
Gary Hamel, one of the world’s most influential business thinkers, emphasises in his blog on the subject “How to rethink the architecture and the ideology of organizations” the importance of challenging our foundational beliefs in order to build organisations that are dramatically more capable than the ones we have today. However, despite our best intentions and efforts, we will in the future still struggle to:
The big questions is how we start analysing the architecture and ideology of modern management in order to deal with the core incompetencies that have a bad influence on organisations.
If interested in exploring Gary Hamel’s blog and viewpoints further, please click here.
Last week the BBRT Members’ Meeting took place in London. 50 Members had two exciting and thought-provoking days taking point of departure in how to reach new levels of performance through engagement.
Ekan Management, our official Beyond Budgeting representative in Sweden, facilitated the Implementers’ Meeting on day one. The meeting raised many interesting viewpoints and exchange of experiences on the topic resource allocation.
On day two, in-depth examples on how new ways of management can create great workplaces was given. Among the speakers was John Timpson, the author of the book: ‘Upside Down Management’ and Chairman of Timpson – a retail service business with over 1300 outlets in UK and Ireland. During his presentation, John Timpson revealed his secret behind his unique management model and the formula for great customer service to the delight of the BBRT Members.
Vlatka Hlupic, Professor of Business and Management at Westminster Business School in London and author of the book ‘The Management Shift – How to Harness the Power of People and Transform Your Organization for Sustainable Success’, demonstrated in the second session HOW organisations can make The Management Shift to a new way of thinking and working. In her presentation, Vlatka Hlupic provided the delegates with comprehensive knowledge regarding her latest research explaining the ‘What’, the ‘Why’ and the ‘How’ of The Management Shift.
In the afternoon, BBRT Members were encouraged to share their thoughts and experiences in the field of Beyond Budgeting and how the principles has evolved over time – a session, which created many interesting and valuable debates and discussions.
Henry Stewart, founder and CEO of Happy Ltd. and author of ‘The Happy Manifesto’, rounded off the autumn’s Members’ Meeting. His business philosophy is based on that “People work best when the feel good about themselves meaning that the principle of management should be making people feel good”. In the presentation, Henry Stewart focused on explaining how to create great workplaces for people in order to reach their full potential. In 2011, Henry Stewart, was listed as one of the top 50 most influential business thinkers in the world by the ‘Guru Radar of the Thinkers’.
We are looking forward to welcoming you at our BBRT Members’ Meetings in 2015.
On 22 October, we held a great open conference about Beyond Budgeting in connection with the BBRT Members’ Meeting in London. The conference, which was organised in cooperation with Happy Ltd., was a great success.
During the day, the delegates gained valuable insight into the Beyond Budgeting management model through interesting case stories and viewpoints presented by leading practitioners from Statoil and Handelsbanken, as well as Julian Birkinshaw from London Business School.
Below, you can read more about the 10 big lessons learned from the conference in pursuit of enabling organisations to build lean, adaptive and ethical enterprises written by Adrian Trenholm from Happy Ltd.:
The purpose of traditional management tools is to help senior managers gain control. However, do not be fooled. Between the unintended consequences of budgets and targets, and the dynamics of the market, you have already lost control.
Unintended consequences are everywhere… and dangerous. Budgeting leads people to game the system. We low ball our sales forecasts and inflate our cost estimates “just in case”. Static targets become irrelevant and disempowering. Traditional management tools do not have a neutral impact. They actively work against what we really want to achieve.
It is human nature to want to do well. Handelbanken’s, for example, has branch staff make decisions. Time after time, staff prove worthy of that trust. To get rid of command and control, you start with belief that your staff can be trusted, because they really want to do well.
One clear inspiring goal works better than a hatful of KPIs. It is simple to understand and everyone can test their plans and actions against it. Multiple goals make it harder to focus and harder to decide the correct course of action. KPIs are useful measures of progress, but remember: they are Indicators, not the Truth – let measurement be your servant, not your master.
We can be smarter than SMART (Specific, Measurable, Assignable, Realistic, Time-related). Instead of deciding an arbitrary number and sticking to it, we can set relative goals such as “outperform the market in activity X” – then measure progress dynamically. The arbitrary number quickly loses meaning and becomes disempowering; the relative goal adapts to circumstances and stays meaningful.
How you achieve a result is as important as the result itself. Have the courage to say “no” to short-term opportunities, which are inconsistent with your values. Be like Handelsbanken, which places the highest value on customer relationships at the branch level. By staying true to that value, Handelsbanken sidestepped the sovereign debt crisis. Because Portugal cannot walk into a local branch, and you cannot have a cup of coffee with Greece.
Mechanisms to steer behaviour – targets, bonuses and so on – short circuit people’s capacity for decision-making. Behaviours become skewed towards hitting arbitrary targets, instead of working towards true goals. Let the human desire to do well – and your shared values – govern behaviour.
Beyond Budgeting requires an almost simultaneous move from static to dynamic processes and from theory X to theory Y management. You cannot do one without the other.
We have too much information and a deficit of attention – and we keep looking for more. We need to replace or at least augment data-driven decision-making with emotional conviction and decisive action. At Statoil, teams do not make plans; they set “Ambitions to Action.”
Evolution is slower than revolution, but it is better than no change at all. The board member who says, “We need to keep doing budgets this way” can derail your revolution in an instant. Do not get into conflict. Keep making changes in both leadership and process until momentum makes change inevitable.
Please, click HERE if you are interested in watching some of the presentations online in order to learn more about the principles of Beyond Budgeting.
In the beginning of October, we held the first open conference about Beyond Budgeting in Southeast Asia ever. We hope that this is the beginning of a strong and vibrant Beyond Budgeting network in this region.
The conference included great examples of the Beyond Budgeting principles in action from great companies from all around the world: Kyocera (Japan), Mainfreight (New Zealand), Telekom Malaysia (Malaysia) and Statoil (Norway).
The conference followed great workshops at BBRT-member Tenaga Nasional Berhad, which is about to embark on their Beyond Budgeting journey.
We have launched a completely new website with several improved features, which better reflects our many activities.
The new website has a new login option for BBRT Members to ensure membership benefits when signing up for our events and conferences and downloading information etc.
Whether you are already a member or if you are visiting for the first time, please take a tour – we hope you will enjoy it.
We have just finalised a Research Paper about Aviva; UK’s largest insurer and one of Europe’s leading providers of life and general insurance with around 34 million customers.
The paper is based on the transformation of practices in Aviva’s call centres in order to meet customer needs rather than targets for calls answered and sales made. It provides an illustration of the way in which customer service can be transformed by adopting a more organic management model in line with the Beyond Budgeting principles with less reliance on procedures, standards, targets and incentives.
The Research Paper is available on the BBRT Members’ website.
The Research Paper is written by David Dugdale (Bristol University) and Rob Wilson (Aviva). The Beyond Budgeting Institute is very grateful for this contribution to our shared knowledge base.
Are you ready to unleash the real power of your people?
Sign up for an inspiring conference co-organized by the Beyond Budgeting Institute. The day is packed with real World case studies and thought-provoking, interactive sessions led by CEOs, business thinkers and pioneering practitioners of Beyond Budgeting. Speakers from London Business School, Handelsbanken UK, Happy Ltd., Statoil and from our Network are getting ready for a great day.
In just one day, you will learn everything you need to sweep away outdated command and control methods and begin your journey towards a leaner, more adaptive, more resilient organisation.
For more information and to sign up please follow the link:
The Management Innovation eXchange (MIX) is an open innovation project aimed at reinventing management for the 21st century. The MIX Mashup 2014, which takes place in New York on 18-20 November, is a gathering of the vanguard of management innovators with a dream: ORGANIZATIONS THAT ARE FIT FOR THE FUTURE—AND FIT FOR HUMAN BEINGS. If you think that this sounds very familiar, then it’s because we work closely together with this network – and we are fighting the exact same battle. Again this year, our chairman Bjarte Bogsnes is among the speakers. The other speakers represent the following inventive and successful organizations : TaylorMade-adidas Golf, the English National Health Service, Cemex, Vagas.com, Loomio and Atlassian.
For more information, click HERE
As part of our research efforts, and in order to increase the awareness about Beyond Budgeting, we reach out to and cooperate with universities, business schools, academics and other thought leaders.
A great example of such cooperation is with NHH Norwegian School of Economics, which has been an active member of BBRT for many years. We are extremely happy with this cooperation and the strong ties we have with many people at NHH. Most recently, Katarina Kaarbøe from NHH was awarded the David Solomons Prize by Management Accounting Research in recognition of the article: “From comfort to stretch zones: A field study of two multinational companies applying beyond budgeting ideas”; a paper she co-authored with Professor Anatoli Bourmistrov from University of Nordland.
NHH has conducted a very interesting study from the Norwegian banking sector which demonstrates a strong negative correlation between long-term financial results and the use of traditional budgets.
Another example of such cooperation is with Católica Porto Business School in Portugal that is now introducing Beyond Budgeting in their executive education.
