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  • 1. What is Beyond Budgeting? Bjarte Bogsnes Vice President - Performance Management Development Chairman - Beyond Budgeting Round table Europe1-
  • 2. Managing traffic performance - one alternative Who is in control? Based on which information?2-
  • 3. Managing traffic performance - another alternative Who is in control? Based on which information?3-
  • 4. Which is most efficient? Which is most difficult? In which are values most important?4-
  • 5. The world has changed –what about the way we lead and manage? Business environment Dynamic Traditional Stable management ”X” ”Y” People
  • 6. We must change both processes and leadership Processes Relative and directional goals Dynamic Dynamic planning, forecasting and resource allocation Holistic performance evaluation Beyond Budgeting Rigid, detailed and annual Values based Stable Rules-based micromanagement Autonomy Centralised command and Transparency control Internal motivation Secrecy, sticks and carrots ”X” ”Y” Leadership
  • 7. 7Some of the companies on a similar journey Europe’s most cost effective universal bank
  • 8. The Beyond Budgeting principles Change in leadership Change in processes 1. Values - Govern through a few clear values, goals and 7. Goals - Set relative goals for continuous improvement, boundaries, not detailed rules and budgets don’t negotiate fixed performance contracts 2. Performance - Create a high performance climate 8. Rewards - Reward shared success based on relative based on relative success, not on meeting fixed targets performance, not on meeting fixed targets 3. Transparency - Promote open information for self 9. Planning - Make planning a continuous and inclusive management, don’t restrict it hierarchically process, not a top-down annual event 4. Organization - Organize as a network of lean, 10. Coordination - Coordinate interactions dynamically, not accountable teams, not around centralized functions through annual planning cycles 5. Autonomy - Give teams the freedom and capability to 11. Resources - Make resources available as needed, not act; don’t micro-manage them through annual budget allocations 6. Customers - Focus everyone on improving customer 12. Controls - Base controls on relative indicators and outcomes, not on hierarchical relationships trends, not on variances against plan8 - Classification: Internal 2011-08-15
  • 9. Simple is not the same as easy …9-
  • 10. Implications for leadership• More autonomy and flexibility but also higher accountability for results• Use your autonomy don’t delegate upwards let it pass on to your teams• Don’t give up if someone misuse trust but react firmly on those who do 10 Classificati on: Internal
  • 11. Questions or comments - now or later? Bjarte Bogsnes + 47 916 13 843 Twitter @bbogsnes Beyond Budgeting Round Table www.bbrt.org11 -
  • 12. Want to hear more? 1. The problems with traditional management 2. The Beyond Budgeting model 3. The Borealis case 4. The Statoil case 5. Implementation advice Out on Wiley (US) Available from e.g. (Now available in Russian and Japanese)12 -