Implementing Beyond Budgeting

The author describes the serious and systemic problems with traditional management practices, and provides concrete alternatives and practical guidance on how to implement the beyond budgeting methodology, drawing on cases in which he has implemented beyond budgeting in large, global companies.

Written by Bjarte Bogsnes, Beyond Budgeting pioneer, Implementing Beyond Budgeting reveals best practices from actual cases where the author headed up implementation of Beyond Budgeting in large global companies. Beginning with a Foreword by Robert Kaplan, cofounder of the Balanced Scorecard, this book reveals how your organization can maximize a performance climate with teams committed to a common purpose, shared rewards, and sustained value creation. This innovative book lucidly presents how every organization can release the ambition and energy of its people who were previously slaves to the budgeting process.

The annual budgeting process is a trap. Pressured by fixed targets and performance incentives, managers focus on making the numbers instead of making a difference, meeting set goals instead of maximizing potential. With their compensation at stake, managers often resort to deceitful-even unethical-behavior. In the end, everybody loses-the employee, the company, and ultimately the customer. Now, finance experts Jeremy Hope and Robin Fraser reveal the results of an intensive study aimed at fixing the broken budgeting process. They argue that companies must abandon traditional budgeting contracts in favor of a radical new model that links performance measurement to evolving competitive benchmarks-and shifts the firm's focus from controlling employee behavior to delivering customer value. The Beyond Budgeting model is built on the best practices of companies that have successfully revised their centralized planning and budgeting processes. It combines a leadership vision that devolves more authority to operating managers and a finance vision that enables fast decision making through appropriate tools and accessible information. Through vivid examples, Hope and Fraser illustrate how companies can implement these shared visions-and the long-term benefits that accrue from embracing them. Offering a compelling case for breaking free from the budgeting trap, this book paves the way toward making organizations better places to work for, invest in, and do business with.

The future of management is here! Traditional management was invented for very different times and is today in serious trouble. The level of volatility, uncertainty, complexity and ambiguity in business environments is record high. People’s expectations towards their employers and leaders have also radically changed. A number of organizations are exploring management innovation that can help them not just coping but thriving and out-performing in these new and different realities. Beyond Budgeting may be the most important new idea out there addressing these radical changes, due to its broad scope and coherent approach. Abolishing the traditional, detailed annual budget is necessary, but not sufficient. Organizations on the journey are questioning their old leadership beliefs and are tearing up their old command-and-control management models, with “agile” and “human” as the foundation for a new start. Implementing Beyond Budgeting is both a theoretical introduction and a practical guide to bringing such a more empowered and adaptive management model to life. Drawing on the author’s twenty years of Beyond Budgeting experience, this book not only demonstrates the serious problems with traditional management through numerous practical examples. It also follows several companies on their Beyond Budgeting journey, including Scandinavia’s largest company Statoil where the author has been heading up implementation since 2005. You'll get a first-hand glimpse at the reality of transitioning a large multinational company, and gain a real-world perspective on what successful implementation entails. This new second edition has been significantly revised and expanded. It covers the amazing development of the Beyond Budgeting movement and how the Statoil implementation journey has continued since the first edition of this book was published in 2009, sustaining major events like for instance the 2015 oil price crash. A new chapter on “Beyond Budgeting and Agile” has also been added. New implementation experiences, great new case stories, new management innovation examples and management metaphors (traffic controls!) are introduced, as well as the author’s latest reflections on a range of management issues including target setting, forecasting, performance evaluation and incentives.

If the very thought of budgets pushes your sanity over the limit, then this practical, easy-to-use guide is just what you need. Budgeting Basics and Beyond, Third Edition equips you with an all-in-one resource guaranteed to make the budgeting process easier, less stressful, and more effective. Written by Jae Shim and Joel Siegel, the new edition covers Balanced Scorecard, budgeting for nonprofit organizations, business simulations for executive and management training, and much more!

Today, companies are expected to be flexible and both rapidly responsive and resilient to change, which basically asks them to be agile. By combining Beyond Budgeting,Open Space, Sociocracy, and Agile, this book provides a practical guide for companies that want to be agile company-wide. Notes to the 2nd edition: This second edition reflects such updates as: the new Agile Fluency Model, the renaming / rebranding of Statoil to Equinor, and some small additions to complexity. We also enhanced the description of Organizational Open Space and explain how it differs from Liberating Structures. Enjoy insights in the book shared by Jez Humble, Diana Larsen, James Shore, Johanna Rothman, and Bjarte Bogsnes. Find out what Spotify, ING, Ericsson, and Walmart say in the book. Quotes from early readers: “[This is] a very important book. My hopes are that it will be the missing link between agile for teams and the flexible, adaptive and humane organisations we want to build. It’s a great book. Thanks for writing it!” ~Sandy Mamoli, author of Creating Great Teams “Just as Spotify has worked hard to make all aspects of product development align well and work together - I see Jutta and John in this book exploring methods and processes that will work very well across the whole company.” ~ Anders Ivarsson, Spotify “I love how those practices [are] integrated and summarized into actionable recommendations.” ~ Yves Lin, Titansoft “Really wonderful balance of structure and space, rigor and creativity, that you're suggesting.” ~ Michael Herman, Openspaceworld.org “Company-wide Agility with Beyond Budgeting, Open Space and Sociocracy [...] makes an important case for companies to regard trust and autonomy the norm, rather than a privilege. [...] Overall a great overview of how leaders can reimagine the way power is distributed within their companies.” ~ Aimee Groth, Author of The Kingdom of Happiness: Inside Tony Hsieh’s Zapponian Utopia This book invites you to take a new perspective that addresses the challenges of doing business in a volatile, uncertain, complex, and ambiguous world.

HR (human resources) finance and budgeting concepts (interpreting financial statements, reporting human capital, time value of money, business valuation concepts, etc.) are featured.

The recent crisis in the financial markets has exposed serious flaws in management methods. The failure to anticipate and deal with the consequences of the unfolding collapse has starkly illustrated what many leaders and managers in business have known for years; in most organizations, the process of forecasting is badly broken. For that reason, forecasting business performance tops the list of concerns for CFO's across the globe. It is time to rethink the way businesses organize and run forecasting processes and how they use the insights that they provide to navigate through these turbulent times. This book synthesizes and structures findings from a range of disciplines and over 60 years of the authors combined practical experience. This is presented in the form of a set of simple strategies that any organization can use to master the process of forecasting. The key message of this book is that while no mortal can predict the future, you can take the steps to be ready for it. ’Good enough’ forecasts, wise preparation and the capability to take timely action, will help your organization to create its own future. Written in an engaging and thought provoking style, Future Ready leads the reader to answers to questions such as: What makes a good forecast? What period should a forecast cover? How frequently should it be updated? What information should it contain? What is the best way to produce a forecast? How can you avoid gaming and other forms of data manipulation? How should a forecast be used? How do you ensure that your forecast is reliable? How accurate does it need to be? How should you deal with risk and uncertainty What is the best way to organize a forecast process? Do you need multiple forecasts? What changes should be made to other performance management processes to facilitate good forecasting? Future Ready is an invaluable guide for practicing managers and a source of insight and inspiration to leaders looking for better ways of doing things and to students of the science and craft of management. Praise for Future Ready "Will make a difference to the way you think about forecasting going forward" —Howard Green, Group Controller Unilever PLC "Great analogies and stories are combined with rock solid theory in a language that even the most reading-averse manager will love from page one" —Bjarte Bogsnes, Vice President Performance Management Development at StatoilHydro "A timely addition to the growing research on management planning and performance measurement." —Dr. Charles T. Horngren, Edmund G. Littlefield Professor of Accounting Emeritus Stanford University and author of many standard texts including Cost Accounting: A Managerial Emphasis, Introduction to Management Accounting, and Financial Accounting "In the area of Forecasting, it is the best book in the market." —Fritz Roemer. Leader of Enterprise Performance Executive Advisory Program, the Hackett Group