SlideShare a Scribd company logo
Beyond Budgeting - the Statoil
     implementation

     Bjarte Bogsnes
     Vice President - Performance Management Development
     Chairman - Beyond Budgeting Round table Europe
1-
Statoil in brief
     • Turnover and market cap                                                                Arctic
       approx. 75 bn. USD
                                                                North Sea & Norwegian Sea
     • 20.000 employees
       in 34 countries                                                                                  Russia

     • World’s largest operator in                           Canada
       waters deeper than 100 metres                                                                   Caspian
     • Second largest gas exporter to                                 North Africa
       Europe                            US Gulf of Mexico
                                                                                                        Middle East
     • World leader of crude oil sales
     • Listed in New York and Oslo                   South America
                                                                                       West Africa




                                                                                              Current production of oil and gas




2-
Fortune 500 ranking (2011)
         Social responsibility    Innovation




3-
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 plan




4 - Classification: Internal   2011-08-15
Start of the Statoil journey
     - solving a serious budget conflict
                                        Step 1                     Step 2

     The budget purposes             Separate                    Improve

                                                        • Ambitious
                                        Target          • Relative KPIs where possible
                                        What we want    • Holistic performance evaluation
       Budget =                         to happen

       •Target                                          • Unbiased - expected outcome
                                        Forecast        • Limited detail
       •Forecast                        What we think
                                        will happen     • Dynamic - no annual allocation
       •Resource allocation
                                                        • KPI targets, mandates, decision
                                        Resource          gates & decision criteria
                                        allocation      • Trend monitoring


       “Same number –                                       “Event driven
       conflicting purposes”   ”Different numbers”          - not calendar driven”


5-
Key principles – Ambition to Action

     Performance is
     ultimately about
     performing
     better than
     those we
     compare
     ourselves with




6-
Statoil financial performance - as we define it

    Total shareholder return 2011   Return on capital (ROCE) 2011
Key principles – Ambition to Action

     Performance is     Do the right        Within this
     ultimately about   thing in the        framework,
     performing         actual situation,   resources are
     better than        guided by the       made available
     those we           Statoil Book,       or allocated
     compare            your Ambition to    case-by-case
     ourselves with     action, decision
                        criteria &
                        authorities and
                        sound business
                        judgement




8-
Spending wisely - the CFO on cost culture




                               Classification:
9                                 Internal
                                2011-11-24
Key principles – Ambition to Action

       Performance is     Do the right        Within this      Business follow   Performance
       ultimately about   thing in the        framework,       up is forward     evaluation is a
       performing         actual situation,   resources are    looking and       holistic
       better than        guided by the       made available   action oriented   assessment of
       those we           Statoil Book,       or allocated                       delivery and
       compare            your Ambition to    case-by-case                       behaviour
       ourselves with     action, decision
                          criteria &
                          authorities and
                          sound business
                          judgement




10 -
The CEO on Ambition to Action




11 -
Ambition to Action - purpose and process
       • Translating strategy - from ambitions to actions
       • Securing flexibility - room to act and perform
       • Activating values and leadership principles

         Strategic                                                   Actions &                  Individual
         objectives                        KPIs                      forecasts                   or team
                                                                                                  goals

       Where are we going –         How do we measure         How do we get            What is my or our
       what does success            progress?                 there?                   contribution?
       look like?
       • Most important strategic   • Indicative measure of   • Concrete actions and   My Performance Goals
         change areas                 strategic delivery        expected delivery      • Delivery
       • Medium term horizon        • 10-12 KPI’s, shorter/     (forecast)
                                                                                       • Behaviour
                                      longer term targets     • Clear deadlines and
                                                                accountabilities



12 -
Ambition to Action example

 People &
Organisation
               Where are we
                                             How do
                 going?
                                             we get
   HSE
                ”Strategic                   there?
                objectives”   How do we
                               measure       ”Actions”
 Operations
                              progress?

  Market
                                  ”Key
                              Performance
                               Indicators”
   Finance
More than 1600 ”Ambition to Action’s”
       across the company




                         …..and more




14 -
Towards a simpler, more dynamic and self-
  regulating Ambition to Action process


                   More cost conscious
                    - less «cost cutting»
                   More event driven
                    - less calendar driven
                   More translation
                    - less cascading
                   More relative
                    - less absolute KPIs




      ”Giving Ambition to Action back to the line”

                                             Classificati
                                             on: Internal
                                             2011-09-07
Implementation advice

       • Create problem understanding before talking solutions
       • What’s the real risk – upside vs downside
       • Design to 80% and jump
       • A ”pull-based” approach
       • ”One war but a thousand battles”
       • Don’t become a fundamentalist




 Classif
ication:
Interna
Questions or comments - now or later?
       Bjarte Bogsnes
       bjbo@statoil.com
       + 47 916 13 843
       Twitter @bbogsnes


       Beyond Budgeting Round Table
       www.bbrt.org


17 -
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. Amazon.co.uk

       (Now available in Russian and Japanese)




18 -

More Related Content

What's hot

2. financial statement analysis
2. financial statement analysis2. financial statement analysis
2. financial statement analysis
Judy Ricamara
 
CIMA -E3 Most widely used frameworks
CIMA -E3   Most widely used frameworksCIMA -E3   Most widely used frameworks
CIMA -E3 Most widely used frameworks
Kapp Edge Solutions Pvt Ltd
 
UPS IPO
UPS IPOUPS IPO
Case analysis boeing 787
Case analysis boeing 787Case analysis boeing 787
Case analysis boeing 787
Ashish Michael
 
Roche holding AG: Genentech Acquisition
Roche holding AG: Genentech AcquisitionRoche holding AG: Genentech Acquisition
Roche holding AG: Genentech Acquisition
Amara Fatima
 
Iphone Danshui plant 2 underproduction problem
Iphone Danshui plant 2 underproduction problemIphone Danshui plant 2 underproduction problem
Iphone Danshui plant 2 underproduction problem
Enock Kasimbazi
 
Balanace score card ppt
Balanace score card pptBalanace score card ppt
Balanace score card ppt
Aravind Reddy
 
SM CH 6 STRATEGY GENERATION AND SELECTION
SM CH 6 STRATEGY GENERATION AND SELECTIONSM CH 6 STRATEGY GENERATION AND SELECTION
SM CH 6 STRATEGY GENERATION AND SELECTION
Shadina Shah
 
Enager Industries,Inc
Enager Industries,IncEnager Industries,Inc
Enager Industries,Inc
shimna rajendran
 
Managerial finance gitman_e12_ch04
Managerial finance gitman_e12_ch04Managerial finance gitman_e12_ch04
Managerial finance gitman_e12_ch04
Turu Turuu
 
160513 Study Sourcing in risk and compliance functions
160513 Study Sourcing in risk and compliance functions160513 Study Sourcing in risk and compliance functions
160513 Study Sourcing in risk and compliance functions
Dr. Marc D. Grüter
 
Balanced score card
Balanced score cardBalanced score card
Balanced score card
SCS universal
 
Creating Value Through Financial Management.
Creating Value Through Financial Management.Creating Value Through Financial Management.
Creating Value Through Financial Management.
Zil Shah
 
Audit of property plant & equipment (PPE) and cash & cash equivalents (CCE)
Audit of property plant & equipment (PPE) and cash & cash equivalents (CCE)Audit of property plant & equipment (PPE) and cash & cash equivalents (CCE)
Audit of property plant & equipment (PPE) and cash & cash equivalents (CCE)
MD ASADUZZAMAN
 
Control self assessment (csa)
Control self assessment (csa)Control self assessment (csa)
Control self assessment (csa)
Idear S. Wanichkul
 
Midland Energy Resources
Midland Energy ResourcesMidland Energy Resources
Midland Energy Resources
Donald Palma
 
Lecture 20 computer based accounting system -revenue cycle - accounting info...
Lecture 20  computer based accounting system -revenue cycle - accounting info...Lecture 20  computer based accounting system -revenue cycle - accounting info...
Lecture 20 computer based accounting system -revenue cycle - accounting info...
Habib Ullah Qamar
 
Ubs investment banking challenge national finals presentation
Ubs investment banking challenge national finals presentation Ubs investment banking challenge national finals presentation
Ubs investment banking challenge national finals presentation
jphil90
 
Managerial Finance By Gitman Chapter 8 solutions
Managerial Finance By Gitman Chapter 8 solutionsManagerial Finance By Gitman Chapter 8 solutions
Managerial Finance By Gitman Chapter 8 solutions
Qaisar Mehar
 
Strategic Management part_01_03
Strategic Management part_01_03Strategic Management part_01_03
Strategic Management part_01_03
Ramadan Babers, PhD
 

What's hot (20)

2. financial statement analysis
2. financial statement analysis2. financial statement analysis
2. financial statement analysis
 
CIMA -E3 Most widely used frameworks
CIMA -E3   Most widely used frameworksCIMA -E3   Most widely used frameworks
CIMA -E3 Most widely used frameworks
 
UPS IPO
UPS IPOUPS IPO
UPS IPO
 
Case analysis boeing 787
Case analysis boeing 787Case analysis boeing 787
Case analysis boeing 787
 
Roche holding AG: Genentech Acquisition
Roche holding AG: Genentech AcquisitionRoche holding AG: Genentech Acquisition
Roche holding AG: Genentech Acquisition
 
Iphone Danshui plant 2 underproduction problem
Iphone Danshui plant 2 underproduction problemIphone Danshui plant 2 underproduction problem
Iphone Danshui plant 2 underproduction problem
 
Balanace score card ppt
Balanace score card pptBalanace score card ppt
Balanace score card ppt
 
SM CH 6 STRATEGY GENERATION AND SELECTION
SM CH 6 STRATEGY GENERATION AND SELECTIONSM CH 6 STRATEGY GENERATION AND SELECTION
SM CH 6 STRATEGY GENERATION AND SELECTION
 
Enager Industries,Inc
Enager Industries,IncEnager Industries,Inc
Enager Industries,Inc
 
Managerial finance gitman_e12_ch04
Managerial finance gitman_e12_ch04Managerial finance gitman_e12_ch04
Managerial finance gitman_e12_ch04
 
160513 Study Sourcing in risk and compliance functions
160513 Study Sourcing in risk and compliance functions160513 Study Sourcing in risk and compliance functions
160513 Study Sourcing in risk and compliance functions
 
Balanced score card
Balanced score cardBalanced score card
Balanced score card
 
Creating Value Through Financial Management.
Creating Value Through Financial Management.Creating Value Through Financial Management.
Creating Value Through Financial Management.
 
Audit of property plant & equipment (PPE) and cash & cash equivalents (CCE)
Audit of property plant & equipment (PPE) and cash & cash equivalents (CCE)Audit of property plant & equipment (PPE) and cash & cash equivalents (CCE)
Audit of property plant & equipment (PPE) and cash & cash equivalents (CCE)
 
Control self assessment (csa)
Control self assessment (csa)Control self assessment (csa)
Control self assessment (csa)
 
Midland Energy Resources
Midland Energy ResourcesMidland Energy Resources
Midland Energy Resources
 
Lecture 20 computer based accounting system -revenue cycle - accounting info...
Lecture 20  computer based accounting system -revenue cycle - accounting info...Lecture 20  computer based accounting system -revenue cycle - accounting info...
Lecture 20 computer based accounting system -revenue cycle - accounting info...
 
Ubs investment banking challenge national finals presentation
Ubs investment banking challenge national finals presentation Ubs investment banking challenge national finals presentation
Ubs investment banking challenge national finals presentation
 
Managerial Finance By Gitman Chapter 8 solutions
Managerial Finance By Gitman Chapter 8 solutionsManagerial Finance By Gitman Chapter 8 solutions
Managerial Finance By Gitman Chapter 8 solutions
 
Strategic Management part_01_03
Strategic Management part_01_03Strategic Management part_01_03
Strategic Management part_01_03
 

Viewers also liked

Presentation for Statoil ASA case study
Presentation for Statoil ASA case studyPresentation for Statoil ASA case study
Presentation for Statoil ASA case study
Fotios N. Zachopoulos
 
Case study for Statoil ASA
Case study for Statoil ASACase study for Statoil ASA
Case study for Statoil ASA
Fotios N. Zachopoulos
 
Strategic Analysis - Statoil
Strategic Analysis - StatoilStrategic Analysis - Statoil
Strategic Analysis - Statoil
George Demiris
 
Bjarte Bogsnes, Vice President Performance Management Development at Statoil ...
Bjarte Bogsnes, Vice President Performance Management Development at Statoil ...Bjarte Bogsnes, Vice President Performance Management Development at Statoil ...
Bjarte Bogsnes, Vice President Performance Management Development at Statoil ...
Global Business Events
 
Bjarte Bogsnes about Beyond Budgeting at ALE2011
Bjarte Bogsnes about Beyond Budgeting at ALE2011Bjarte Bogsnes about Beyond Budgeting at ALE2011
Bjarte Bogsnes about Beyond Budgeting at ALE2011
Olaf Lewitz
 
Crap. The Content Marketing Deluge.
Crap. The Content Marketing Deluge.Crap. The Content Marketing Deluge.
Crap. The Content Marketing Deluge.
Velocity Partners
 
Advancing Therapy for PAH
Advancing Therapy for PAHAdvancing Therapy for PAH
Advancing Therapy for PAH
Jennifer Sposito
 
Statoil Norway CSR Report
Statoil Norway CSR Report Statoil Norway CSR Report
Statoil Norway CSR Report
Akanksha Singh
 
Improving the capital project allocation process
Improving the capital project allocation processImproving the capital project allocation process
Improving the capital project allocation process
jarobertson2
 
Bakken Development: Pathway to Success, Roadmap to a New Tomorrow
Bakken Development: Pathway to Success, Roadmap to a New TomorrowBakken Development: Pathway to Success, Roadmap to a New Tomorrow
Bakken Development: Pathway to Success, Roadmap to a New Tomorrow
Statoil
 
Classic company diagnostic
Classic company diagnosticClassic company diagnostic
Classic company diagnostic
Mike Paxton
 
The Beyond Budgeting Principles
The Beyond Budgeting PrinciplesThe Beyond Budgeting Principles
The Beyond Budgeting Principles
Lean Enterprise Software and Systems Conference
 
What is Beyond Budgeting?
What is Beyond Budgeting?What is Beyond Budgeting?
Pulmonary Hypertension, Current Guidelines and Future Directions of Therapy.
Pulmonary Hypertension, Current Guidelines and Future Directions of Therapy.Pulmonary Hypertension, Current Guidelines and Future Directions of Therapy.
Pulmonary Hypertension, Current Guidelines and Future Directions of Therapy.
Bassel Ericsoussi, MD
 
APLS-Drive the ambitions of my LC
APLS-Drive the ambitions of my LCAPLS-Drive the ambitions of my LC
APLS-Drive the ambitions of my LC
AIESEC
 
Ambition Presentation Jenny
Ambition Presentation JennyAmbition Presentation Jenny
Ambition Presentation Jenny
Charity and Events> English Club, Education
 
How to Create a Strategic Action Plan?
How to Create a Strategic Action Plan?How to Create a Strategic Action Plan?
How to Create a Strategic Action Plan?
Consultants to Help (AKACTH)
 
Forrester Report: The Total Economic Impact of Domo
Forrester Report: The Total Economic Impact of DomoForrester Report: The Total Economic Impact of Domo
Forrester Report: The Total Economic Impact of Domo
Domo
 
Corporate Innovation - Silicon Valley - Intrapreneurship. By corpor8
Corporate Innovation - Silicon Valley - Intrapreneurship. By corpor8Corporate Innovation - Silicon Valley - Intrapreneurship. By corpor8
Corporate Innovation - Silicon Valley - Intrapreneurship. By corpor8
Tommaso Di Bartolo
 
Multidevice Mambo
Multidevice MamboMultidevice Mambo
Multidevice Mambo
Josh Clark
 

Viewers also liked (20)

Presentation for Statoil ASA case study
Presentation for Statoil ASA case studyPresentation for Statoil ASA case study
Presentation for Statoil ASA case study
 
Case study for Statoil ASA
Case study for Statoil ASACase study for Statoil ASA
Case study for Statoil ASA
 
Strategic Analysis - Statoil
Strategic Analysis - StatoilStrategic Analysis - Statoil
Strategic Analysis - Statoil
 
Bjarte Bogsnes, Vice President Performance Management Development at Statoil ...
Bjarte Bogsnes, Vice President Performance Management Development at Statoil ...Bjarte Bogsnes, Vice President Performance Management Development at Statoil ...
Bjarte Bogsnes, Vice President Performance Management Development at Statoil ...
 
Bjarte Bogsnes about Beyond Budgeting at ALE2011
Bjarte Bogsnes about Beyond Budgeting at ALE2011Bjarte Bogsnes about Beyond Budgeting at ALE2011
Bjarte Bogsnes about Beyond Budgeting at ALE2011
 
Crap. The Content Marketing Deluge.
Crap. The Content Marketing Deluge.Crap. The Content Marketing Deluge.
Crap. The Content Marketing Deluge.
 
Advancing Therapy for PAH
Advancing Therapy for PAHAdvancing Therapy for PAH
Advancing Therapy for PAH
 
Statoil Norway CSR Report
Statoil Norway CSR Report Statoil Norway CSR Report
Statoil Norway CSR Report
 
Improving the capital project allocation process
Improving the capital project allocation processImproving the capital project allocation process
Improving the capital project allocation process
 
Bakken Development: Pathway to Success, Roadmap to a New Tomorrow
Bakken Development: Pathway to Success, Roadmap to a New TomorrowBakken Development: Pathway to Success, Roadmap to a New Tomorrow
Bakken Development: Pathway to Success, Roadmap to a New Tomorrow
 
Classic company diagnostic
Classic company diagnosticClassic company diagnostic
Classic company diagnostic
 
The Beyond Budgeting Principles
The Beyond Budgeting PrinciplesThe Beyond Budgeting Principles
The Beyond Budgeting Principles
 
What is Beyond Budgeting?
What is Beyond Budgeting?What is Beyond Budgeting?
What is Beyond Budgeting?
 
Pulmonary Hypertension, Current Guidelines and Future Directions of Therapy.
Pulmonary Hypertension, Current Guidelines and Future Directions of Therapy.Pulmonary Hypertension, Current Guidelines and Future Directions of Therapy.
Pulmonary Hypertension, Current Guidelines and Future Directions of Therapy.
 
APLS-Drive the ambitions of my LC
APLS-Drive the ambitions of my LCAPLS-Drive the ambitions of my LC
APLS-Drive the ambitions of my LC
 
Ambition Presentation Jenny
Ambition Presentation JennyAmbition Presentation Jenny
Ambition Presentation Jenny
 
How to Create a Strategic Action Plan?
How to Create a Strategic Action Plan?How to Create a Strategic Action Plan?
How to Create a Strategic Action Plan?
 
Forrester Report: The Total Economic Impact of Domo
Forrester Report: The Total Economic Impact of DomoForrester Report: The Total Economic Impact of Domo
Forrester Report: The Total Economic Impact of Domo
 
Corporate Innovation - Silicon Valley - Intrapreneurship. By corpor8
Corporate Innovation - Silicon Valley - Intrapreneurship. By corpor8Corporate Innovation - Silicon Valley - Intrapreneurship. By corpor8
Corporate Innovation - Silicon Valley - Intrapreneurship. By corpor8
 
Multidevice Mambo
Multidevice MamboMultidevice Mambo
Multidevice Mambo
 

Similar to Implementing Statoil’s Ambition to Action management model

2. ICV Kongres controllera, Bjarte Bogsnes, Vice President Performance Manage...
2. ICV Kongres controllera, Bjarte Bogsnes, Vice President Performance Manage...2. ICV Kongres controllera, Bjarte Bogsnes, Vice President Performance Manage...
2. ICV Kongres controllera, Bjarte Bogsnes, Vice President Performance Manage...
Menadžment Centar Beograd
 
Beyond budgeting - an agile management model for new business and people rea...
Beyond budgeting  - an agile management model for new business and people rea...Beyond budgeting  - an agile management model for new business and people rea...
Beyond budgeting - an agile management model for new business and people rea...
Smidigkonferansen
 
Bjarte Bogsnes: Smidig og tillitsbasert virksomhetsstyring
Bjarte Bogsnes: Smidig og tillitsbasert virksomhetsstyringBjarte Bogsnes: Smidig og tillitsbasert virksomhetsstyring
Bjarte Bogsnes: Smidig og tillitsbasert virksomhetsstyring
Smidigkonferansen
 
Keynote: Beyond Budgeting
Keynote: Beyond Budgeting Keynote: Beyond Budgeting
Agileee 2013: Bjarte Bogsnes "Beyond Budgeting – a management model for new b...
Agileee 2013: Bjarte Bogsnes "Beyond Budgeting – a management model for new b...Agileee 2013: Bjarte Bogsnes "Beyond Budgeting – a management model for new b...
Agileee 2013: Bjarte Bogsnes "Beyond Budgeting – a management model for new b...
SCRUMguides
 
Latihan keusahawanan kaedah baru
Latihan keusahawanan   kaedah baruLatihan keusahawanan   kaedah baru
Latihan keusahawanan kaedah baru
Hj Arriffin Mansor
 
Bjarte-Bogsnes-BBRT17-PowerPoint-presentation.ppt
Bjarte-Bogsnes-BBRT17-PowerPoint-presentation.pptBjarte-Bogsnes-BBRT17-PowerPoint-presentation.ppt
Bjarte-Bogsnes-BBRT17-PowerPoint-presentation.ppt
sreeeswar
 
Strategy planning by dr shabon palcare 2011
Strategy planning by dr shabon  palcare 2011Strategy planning by dr shabon  palcare 2011
Strategy planning by dr shabon palcare 2011
Dr Roohullah Shabon
 
Fp&a operating model
Fp&a operating modelFp&a operating model
Fp&a operating model
jarobertson2
 
Basic Concepts Of Strategic Management
Basic Concepts Of Strategic ManagementBasic Concepts Of Strategic Management
Basic Concepts Of Strategic Management
hassnibaba
 
Balanced Scorecard (BSC) for cultural projects and institutions
Balanced Scorecard (BSC) for cultural projects and institutionsBalanced Scorecard (BSC) for cultural projects and institutions
Balanced Scorecard (BSC) for cultural projects and institutions
TheCultKit
 
Company Strategy and Execution
Company Strategy and ExecutionCompany Strategy and Execution
Company Strategy and Execution
Yudy Yunardy
 
Strategic program management
Strategic program managementStrategic program management
Strategic program management
Edwin Provencal
 
Strategic program management
Strategic program managementStrategic program management
Strategic program management
Edwin Provencal
 
Lean Administration And Fast Closing
Lean Administration And Fast ClosingLean Administration And Fast Closing
Lean Administration And Fast Closing
ggiacoma
 
Insync10 1708 145 vella
Insync10 1708 145 vellaInsync10 1708 145 vella
Insync10 1708 145 vella
InSync Conference
 
Independent Schools Strategic Planning Presentation
Independent Schools Strategic Planning Presentation Independent Schools Strategic Planning Presentation
Independent Schools Strategic Planning Presentation
lieberman
 
Resume Adel Hussein
Resume   Adel HusseinResume   Adel Hussein
Resume Adel Hussein
adoooool
 
Balanced scorecard overview slides
Balanced scorecard overview slidesBalanced scorecard overview slides
Balanced scorecard overview slides
Tools4management.com
 
Business management 1.6
Business management 1.6Business management 1.6
Business management 1.6
LeenaKP
 

Similar to Implementing Statoil’s Ambition to Action management model (20)

2. ICV Kongres controllera, Bjarte Bogsnes, Vice President Performance Manage...
2. ICV Kongres controllera, Bjarte Bogsnes, Vice President Performance Manage...2. ICV Kongres controllera, Bjarte Bogsnes, Vice President Performance Manage...
2. ICV Kongres controllera, Bjarte Bogsnes, Vice President Performance Manage...
 
Beyond budgeting - an agile management model for new business and people rea...
Beyond budgeting  - an agile management model for new business and people rea...Beyond budgeting  - an agile management model for new business and people rea...
Beyond budgeting - an agile management model for new business and people rea...
 
Bjarte Bogsnes: Smidig og tillitsbasert virksomhetsstyring
Bjarte Bogsnes: Smidig og tillitsbasert virksomhetsstyringBjarte Bogsnes: Smidig og tillitsbasert virksomhetsstyring
Bjarte Bogsnes: Smidig og tillitsbasert virksomhetsstyring
 
Keynote: Beyond Budgeting
Keynote: Beyond Budgeting Keynote: Beyond Budgeting
Keynote: Beyond Budgeting
 
Agileee 2013: Bjarte Bogsnes "Beyond Budgeting – a management model for new b...
Agileee 2013: Bjarte Bogsnes "Beyond Budgeting – a management model for new b...Agileee 2013: Bjarte Bogsnes "Beyond Budgeting – a management model for new b...
Agileee 2013: Bjarte Bogsnes "Beyond Budgeting – a management model for new b...
 
Latihan keusahawanan kaedah baru
Latihan keusahawanan   kaedah baruLatihan keusahawanan   kaedah baru
Latihan keusahawanan kaedah baru
 
Bjarte-Bogsnes-BBRT17-PowerPoint-presentation.ppt
Bjarte-Bogsnes-BBRT17-PowerPoint-presentation.pptBjarte-Bogsnes-BBRT17-PowerPoint-presentation.ppt
Bjarte-Bogsnes-BBRT17-PowerPoint-presentation.ppt
 
Strategy planning by dr shabon palcare 2011
Strategy planning by dr shabon  palcare 2011Strategy planning by dr shabon  palcare 2011
Strategy planning by dr shabon palcare 2011
 
Fp&a operating model
Fp&a operating modelFp&a operating model
Fp&a operating model
 
Basic Concepts Of Strategic Management
Basic Concepts Of Strategic ManagementBasic Concepts Of Strategic Management
Basic Concepts Of Strategic Management
 
Balanced Scorecard (BSC) for cultural projects and institutions
Balanced Scorecard (BSC) for cultural projects and institutionsBalanced Scorecard (BSC) for cultural projects and institutions
Balanced Scorecard (BSC) for cultural projects and institutions
 
Company Strategy and Execution
Company Strategy and ExecutionCompany Strategy and Execution
Company Strategy and Execution
 
Strategic program management
Strategic program managementStrategic program management
Strategic program management
 
Strategic program management
Strategic program managementStrategic program management
Strategic program management
 
Lean Administration And Fast Closing
Lean Administration And Fast ClosingLean Administration And Fast Closing
Lean Administration And Fast Closing
 
Insync10 1708 145 vella
Insync10 1708 145 vellaInsync10 1708 145 vella
Insync10 1708 145 vella
 
Independent Schools Strategic Planning Presentation
Independent Schools Strategic Planning Presentation Independent Schools Strategic Planning Presentation
Independent Schools Strategic Planning Presentation
 
Resume Adel Hussein
Resume   Adel HusseinResume   Adel Hussein
Resume Adel Hussein
 
Balanced scorecard overview slides
Balanced scorecard overview slidesBalanced scorecard overview slides
Balanced scorecard overview slides
 
Business management 1.6
Business management 1.6Business management 1.6
Business management 1.6
 

More from Lean Enterprise Software and Systems Conference

Implementing the Beyond Budgeting Principles in Össur
Implementing the Beyond Budgeting Principles in ÖssurImplementing the Beyond Budgeting Principles in Össur
Implementing the Beyond Budgeting Principles in Össur
Lean Enterprise Software and Systems Conference
 
Trust & Transparency – Foundations for Europe’s Best Workplace
Trust & Transparency – Foundations for Europe’s Best WorkplaceTrust & Transparency – Foundations for Europe’s Best Workplace
Trust & Transparency – Foundations for Europe’s Best Workplace
Lean Enterprise Software and Systems Conference
 
Methods used in scaling Scrum: An experience report
Methods used in scaling Scrum: An experience reportMethods used in scaling Scrum: An experience report
Methods used in scaling Scrum: An experience report
Lean Enterprise Software and Systems Conference
 
A3 language as the glue for lean transformation
A3 language as the glue for lean transformationA3 language as the glue for lean transformation
A3 language as the glue for lean transformation
Lean Enterprise Software and Systems Conference
 
Organizational alienation
Organizational alienationOrganizational alienation
Beyond the development system
Beyond the development systemBeyond the development system
Beyond Budgeting: Driver-Based Forecasting and Performance Management
Beyond Budgeting: Driver-Based Forecasting and Performance ManagementBeyond Budgeting: Driver-Based Forecasting and Performance Management
Beyond Budgeting: Driver-Based Forecasting and Performance Management
Lean Enterprise Software and Systems Conference
 
Kanban is not your process
Kanban is not your processKanban is not your process
Beyond Budgeting: What Really Motivates Employees
Beyond Budgeting: What Really Motivates EmployeesBeyond Budgeting: What Really Motivates Employees
Beyond Budgeting: What Really Motivates Employees
Lean Enterprise Software and Systems Conference
 
Transforming Organizations: Keep it lighthearted
Transforming Organizations: Keep it lightheartedTransforming Organizations: Keep it lighthearted
Transforming Organizations: Keep it lighthearted
Lean Enterprise Software and Systems Conference
 
Complexity Theory: Coaching in a Complex Environment
Complexity Theory: Coaching in a Complex EnvironmentComplexity Theory: Coaching in a Complex Environment
Complexity Theory: Coaching in a Complex Environment
Lean Enterprise Software and Systems Conference
 
Lean software management bbc worldwide case study nov less 2011
Lean software management bbc worldwide case study nov less  2011Lean software management bbc worldwide case study nov less  2011
Lean software management bbc worldwide case study nov less 2011
Lean Enterprise Software and Systems Conference
 
The Science of Kanban
The Science of KanbanThe Science of Kanban
A Hoop Through the OODA Loop
A Hoop Through the OODA LoopA Hoop Through the OODA Loop
Subject to Change
Subject to ChangeSubject to Change

More from Lean Enterprise Software and Systems Conference (15)

Implementing the Beyond Budgeting Principles in Össur
Implementing the Beyond Budgeting Principles in ÖssurImplementing the Beyond Budgeting Principles in Össur
Implementing the Beyond Budgeting Principles in Össur
 
Trust & Transparency – Foundations for Europe’s Best Workplace
Trust & Transparency – Foundations for Europe’s Best WorkplaceTrust & Transparency – Foundations for Europe’s Best Workplace
Trust & Transparency – Foundations for Europe’s Best Workplace
 
Methods used in scaling Scrum: An experience report
Methods used in scaling Scrum: An experience reportMethods used in scaling Scrum: An experience report
Methods used in scaling Scrum: An experience report
 
A3 language as the glue for lean transformation
A3 language as the glue for lean transformationA3 language as the glue for lean transformation
A3 language as the glue for lean transformation
 
Organizational alienation
Organizational alienationOrganizational alienation
Organizational alienation
 
Beyond the development system
Beyond the development systemBeyond the development system
Beyond the development system
 
Beyond Budgeting: Driver-Based Forecasting and Performance Management
Beyond Budgeting: Driver-Based Forecasting and Performance ManagementBeyond Budgeting: Driver-Based Forecasting and Performance Management
Beyond Budgeting: Driver-Based Forecasting and Performance Management
 
Kanban is not your process
Kanban is not your processKanban is not your process
Kanban is not your process
 
Beyond Budgeting: What Really Motivates Employees
Beyond Budgeting: What Really Motivates EmployeesBeyond Budgeting: What Really Motivates Employees
Beyond Budgeting: What Really Motivates Employees
 
Transforming Organizations: Keep it lighthearted
Transforming Organizations: Keep it lightheartedTransforming Organizations: Keep it lighthearted
Transforming Organizations: Keep it lighthearted
 
Complexity Theory: Coaching in a Complex Environment
Complexity Theory: Coaching in a Complex EnvironmentComplexity Theory: Coaching in a Complex Environment
Complexity Theory: Coaching in a Complex Environment
 
Lean software management bbc worldwide case study nov less 2011
Lean software management bbc worldwide case study nov less  2011Lean software management bbc worldwide case study nov less  2011
Lean software management bbc worldwide case study nov less 2011
 
The Science of Kanban
The Science of KanbanThe Science of Kanban
The Science of Kanban
 
A Hoop Through the OODA Loop
A Hoop Through the OODA LoopA Hoop Through the OODA Loop
A Hoop Through the OODA Loop
 
Subject to Change
Subject to ChangeSubject to Change
Subject to Change
 

Implementing Statoil’s Ambition to Action management model

  • 1. Beyond Budgeting - the Statoil implementation Bjarte Bogsnes Vice President - Performance Management Development Chairman - Beyond Budgeting Round table Europe 1-
  • 2. Statoil in brief • Turnover and market cap Arctic approx. 75 bn. USD North Sea & Norwegian Sea • 20.000 employees in 34 countries Russia • World’s largest operator in Canada waters deeper than 100 metres Caspian • Second largest gas exporter to North Africa Europe US Gulf of Mexico Middle East • World leader of crude oil sales • Listed in New York and Oslo South America West Africa Current production of oil and gas 2-
  • 3. Fortune 500 ranking (2011) Social responsibility Innovation 3-
  • 4. 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 plan 4 - Classification: Internal 2011-08-15
  • 5. Start of the Statoil journey - solving a serious budget conflict Step 1 Step 2 The budget purposes Separate Improve • Ambitious Target • Relative KPIs where possible What we want • Holistic performance evaluation Budget = to happen •Target • Unbiased - expected outcome Forecast • Limited detail •Forecast What we think will happen • Dynamic - no annual allocation •Resource allocation • KPI targets, mandates, decision Resource gates & decision criteria allocation • Trend monitoring “Same number – “Event driven conflicting purposes” ”Different numbers” - not calendar driven” 5-
  • 6. Key principles – Ambition to Action Performance is ultimately about performing better than those we compare ourselves with 6-
  • 7. Statoil financial performance - as we define it Total shareholder return 2011 Return on capital (ROCE) 2011
  • 8. Key principles – Ambition to Action Performance is Do the right Within this ultimately about thing in the framework, performing actual situation, resources are better than guided by the made available those we Statoil Book, or allocated compare your Ambition to case-by-case ourselves with action, decision criteria & authorities and sound business judgement 8-
  • 9. Spending wisely - the CFO on cost culture Classification: 9 Internal 2011-11-24
  • 10. Key principles – Ambition to Action Performance is Do the right Within this Business follow Performance ultimately about thing in the framework, up is forward evaluation is a performing actual situation, resources are looking and holistic better than guided by the made available action oriented assessment of those we Statoil Book, or allocated delivery and compare your Ambition to case-by-case behaviour ourselves with action, decision criteria & authorities and sound business judgement 10 -
  • 11. The CEO on Ambition to Action 11 -
  • 12. Ambition to Action - purpose and process • Translating strategy - from ambitions to actions • Securing flexibility - room to act and perform • Activating values and leadership principles Strategic Actions & Individual objectives KPIs forecasts or team goals Where are we going – How do we measure How do we get What is my or our what does success progress? there? contribution? look like? • Most important strategic • Indicative measure of • Concrete actions and My Performance Goals change areas strategic delivery expected delivery • Delivery • Medium term horizon • 10-12 KPI’s, shorter/ (forecast) • Behaviour longer term targets • Clear deadlines and accountabilities 12 -
  • 13. Ambition to Action example People & Organisation Where are we How do going? we get HSE ”Strategic there? objectives” How do we measure ”Actions” Operations progress? Market ”Key Performance Indicators” Finance
  • 14. More than 1600 ”Ambition to Action’s” across the company …..and more 14 -
  • 15. Towards a simpler, more dynamic and self- regulating Ambition to Action process More cost conscious - less «cost cutting» More event driven - less calendar driven More translation - less cascading More relative - less absolute KPIs ”Giving Ambition to Action back to the line” Classificati on: Internal 2011-09-07
  • 16. Implementation advice • Create problem understanding before talking solutions • What’s the real risk – upside vs downside • Design to 80% and jump • A ”pull-based” approach • ”One war but a thousand battles” • Don’t become a fundamentalist Classif ication: Interna
  • 17. Questions or comments - now or later? Bjarte Bogsnes bjbo@statoil.com + 47 916 13 843 Twitter @bbogsnes Beyond Budgeting Round Table www.bbrt.org 17 -
  • 18. 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. Amazon.co.uk (Now available in Russian and Japanese) 18 -