Implementing Beyond Budgeting

Foreword xi
 
Acknowledgments xiii
 
About the Author xv
 
Introduction xvii
 
CHAPTER 1 Problems with Traditional Management 1
 
Introduction 1
 
Which Way in a New Business Environment? 4
 
The Trust and Transparency Problem 7
 
The Cost Management Problem 14
 
The Control Problem 22
 
The Target-Setting Problem 26
 
The Performance Evaluation Problem 30
 
The Bonus Problem 34
 
The Rhythm Problem 45
 
The Quality Problem 49
 
The Efficiency Problem 52
 
CHAPTER 2 Beyond Budgeting 55
 
The Philosophy 55
 
Beyond Budgeting Roundtable 65
 
The Beyond Budgeting Principles 69
 
Handelsbanken--the Pioneer 74
 
Miles--a Master of Servant Leadership 80
 
The Reitan Group--Values at the Core 84
 
CHAPTER 3 The Borealis Case 91
 
Introduction 91
 
Creation of Borealis 92
 
The Journey Begins 94
 
The Borealis Model 99
 
Implementation Experiences and Lessons Learned 115
 
Borealis Today 119
 
CHAPTER 4 The Statoil Case 123
 
Introduction 123
 
Creating the Foundation 126
 
Starting Out 130
 
The Statoil Model 134
 
A Dynamic Ambition to Action 190
 
What Could Be Next? 199
 
The Beyond Budgeting Research Program 210
 
How Are We Doing? 212
 
A New Start for Statoil? 217
 
CHAPTER 5 Beyond Budgeting and Agile 221
 
CHAPTER 6 Making the Change: Implementation Advice 229
 
Create the Case for Change 232
 
Handle Resistance 238
 
Design to 80 Percent and Jump 240
 
Keep the Cost Focus 241
 
Don't Start with Rolling Forecasting Only 243
 
Involve Human Resources and Agile IT 244
 
You Can't Get Rid of Command and Control through Command and Control 246
 
Do Not Become a Fundamentalist 249
 
Balanced Scorecard Pitfalls

BJARTE BOGSNES has had a long international career, both in Finance and HR. He has been advocating Beyond Budgeting for more than twenty years and led its implementation at two large European companies, Statoil and Borealis. Bjarte is the chairman of Beyond Budgeting Roundtable (BBRT) and is a popular international business speaker. He is the winner of a Harvard Business Review/McKinsey Management Innovation award.

"Budgeting, which lies at the heart of management, is typically backward-looking, inflexible, politicized, and overly conservative -- in other words, it's a drag on organizational vitality. But in this provocative book, Bjarte Bogsnes shows you how to radically retool the budgeting process in your organization. Based on his experience in large and complex organizations, he takes you through a step-by-step process for transforming the way your organization is managed. This is essential reading if you want to build an organization that is fit for the future."
--Professor Gary Hamel, London Business School
 
"This book is about how to create the right conditions to liberate people from traditional management practices, which organizations build as they grow, but which usually lead to reduced agility, employee disengagement, and ultimately decline. Since his 2009 book, Bjarte has journeyed a lot further beyond budgeting, gaining substantial new insights from practical experience, told in this edition as ever with great readability, authenticity, and enthusiasm."
-- Robin Fraser, co-founder of the Beyond Budgeting Roundtable; co-author with the late Jeremy Hope of Beyond Budgeting
 
"While it is common to hear managers complain about budgeting activities, too few are aware that the problems with budget management are more insidious. Budget management is a major cause of sub-optimisation; in simple terms, it makes performance worse. As with many human inventions, it solved problems of its time, but as time has moved on the problems and opportunities have changed. This book charts the development of better methods, balancing purpose and practice; improving the effectiveness of decision making; and, hence, organisation performance."
--John Seddon, Vanguard
 
Praise for the First Edition
 
"At last, Bjarte Bogsnes has made his experience and enthusiasm for Beyond Budgeting available for a wider audience with this remarkable book. I have