Currently, he is Chairman of the Beyond Budgeting Roundtable, and has helped numerous companies globally getting started on their own Beyond Budgeting journey.
Let’s start with the basics. How can Beyond Budgeting help organizations to be more adaptive?
It starts with defining performance in a more meaningful way, and then designing a management model that enables, not manages, such performance.
This requires radically challenging the two main assumptions behind traditional management; that the future is predictable and planable, and that people can’t be trusted. This requires management processes that are much more VUCA robust and much more aligned with a theory Y people view.
These management processes provide much more autonomy and transparency. They are organized more around business rhythms than a calendar rhythm. It is very much about improving decision making; making decisions at the right time, at the right level, for the right reasons.
For a company that is thinking about adopting Beyond Budgeting, what would the recommended approach be? Where to start?
Start with establishing your case for change. Which problems are you trying to solve? The better job done here in creating a common understanding, the easier the rest.
Many then continue with separation of the three budget purposes (target setting, forecasting, resource allocation), which allows for radically improving each one in line with what was said above.
For some people Beyond Budgeting is a kind of “agile-before-agile”.
What do you think about this? The use of agile principles and frameworks are fully compatible with Beyond budgeting?
Beyond Budgeting is business agility in practice. Agile was originally not developed as a way to run an organization, it was born as a way to radically improve software development.
There are therefore many “holes” in Agile, which Beyond Budgeting fills in a way very compatible with the spirit of the Agile Manifesto.
A recent trend related with the way organizations create their products and services is Value Stream Management. How do you see the role of Beyond Budgeting regarding VSM?
You can apply VSM in a Beyond Budgeting model, but also VSM was not designed as a complete organizational management model.
What does an organization that has adopted Beyond Budgeting looks like? What are the differences with conventional organizations?
There are many. They are typically more adaptive and more human. They tend to perform well and are attractive places to work. They define performance in new and better ways, and have coherence between leadership principles and management processes, between what is said and what is done.
More on Beyond Budgeting
If you want to learn more, you can listen to Bjarte Bogsnes during his Keynote Presentation at Adaptive Organizations Week.
He explains the principles of Beyond Budgeting as well as the model carried out in the company Equinor “Ambition to Action” through its implementation experiences and advice to achieve a more self-regulating management model.