There is life beyond the figures of hate .... Beyond Budgeting !
Here are some excerpts from a thought-provoking article about the work of
the Beyond Budgeting Round Table ---- yes ---- it seems that the BBRT
exists. Sounds bizarre ..... but
the article makes some telling points and offers some sensible alternatives.
"In essence, Beyond Budgeting entails a shift
from a performance emphasis on numbers to one based on people. It assumes that
performance improvement is more likely to come from giving capable people
control over decisions (and making them accountable for results),
than from simply adopting different measures and incentives.
This is not a comfortable message for a measurement industry that believes
that implementing Economic Value Added or Balanced Scorecard are enough on their
own to change performance. It is the combination of effective organisation
and behaviour and effective performance management that leads to success.
Just like any mathematical equation with multiplicative variables, if any of the
variables is zero, the net result will be zero. The failure to recognise this
has wrecked many attempts at performance improvement.
A recent Business Week feature on
organisations in the 21st century warned managers:
And according to Gary Hamel :
The concept of how a successful company operates
in the information age is shifting from “make-and-sell” to
Make-and-sell is an industrial-age model
based on transactions, capital assets, mass production, economies of scale and
product margins. Sense-and-respond is an information- and service-age model,
which emphasises client relationships, intellectual assets, mass customisation,
scope and value creation.
To compete successfully in the information age,
managers must be exceptionally good at six key issues.
create a climate for fast response,
engage the best people,
generate new business concepts,
operate with low costs,
find and keep the right customers and
keep shareholders satisfied."
Authors: Robin Fraser (programme director of the CAM-I Beyond Budgeting Round
Table) and Jeremy Hope (a consultant).
Brighten-up your day ---- read all about these ideas and others in the
February 2001 edition of “Financial Management”, a magazine published by the
Chartered Institute of Management Accountants (CIMA). Write to firstname.lastname@example.org or visit http://www.cimaglobal.com.
Editor: Ron Wells