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Welcome to the BBRT global newsletter, which is designed to keep you informed of developments in Beyond Budgeting and the BBRT. For further information visit our web site at www.bbrt.org.
How management roles and responsibilities need to change to support decentralization and innovation
Any serious attempt at building a decentralized organization will be easily derailed unless leaders pay a lot of attention to realigning management roles and responsibilities. The old multi-layered line management model built around detailed budgets and targets disappears. In its place is a flatter organization with only three or four management layers that collaborate continuously to satisfy internal and external customers. Group leaders inspire and challenge; senior managers coach and support; business unit teams develop and execute strategy; and front line teams look to continuously improve their process performance and reduce costs. This paper explains these new roles.
Why financial incentives destroy motivation and innovation
Isn’t it amazing that we spend our early years at university learning from the great social scientists such as Mayo, McGregor and Maslow that people are not motivated by money, but once we rise to management positions of authority we act in the opposite way. This paper refreshes our memories of the motivation debate and looks at how some highly successful companies have turned McGregor's Theory Y into practice.
The BBRT INSIGHTS research papers are delivered to BBRT members on a regular basis. BBRT members can download the full paper from the BBRT Private Forum. Join the BBRT to get access to the full papers and all the past BBRT research material.
In his new book "Profit for Life: How capitalism excels"*, Joseph Bragdon maintains that two fundamentally different models of capitalism are operating in the business world today. One is self-destructive and increasingly corrupt. The other is emergent, flourishing, and inspirational. The essential differences between the two are not well understood, although global stock and bond markets see clear differences in their results. He explains those essential differences, and reveals the extraordinary results of the more successful model.
The book's title conveys an important message. Firms that aim to profit for life must respect life. For them, profit is not a primary goal but a means to higher ends of service. They think and behave in ways that continually affirm life--from their corporate missions, visions, and values to the ways they are organized and managed. Their operating leverage resides in their capacity to inspire. Profit for Life explains why these exemplars attract the most loyal employees, strategic partners, customers, and investors. Bragdon draws a clear line of demarcation between these two mental models. The emergent model sees the company as an organic, living system whose primary means of growth are living assets (people and Nature). Their growth strategies naturally emphasize stewardship of living assets--serving people and Nature. The decaying model, by contrast, sees the firm as a profit-making machine whose growth is driven by nonliving (capital) assets. Accordingly, their strategies look to increase the scale of capital assets.
Bragdon's thesis and the examples he uses (such as Toyota, Nucor, and Southwest Airlines) bear strong parallels with the Beyond Budgeting transformational management model. This is yet more evidence that a management model based on seeing the organization and a living organism provides sustainability over the short and long term, in good times and bad times.
* Bragdon, J.H. (2006) Profit for Life: How capitalism excels, Cambridge MA: Society for Organizational Learning. Click here for link to Amazon.com.
We have great pleasure in welcoming the following organization as a member of the BBRT:
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July
BBRT is an independent international shared learning network for all organizations that seek to improve their performance management through sharing information, past successes and implementation experiences. Our purpose is to help organizations introduce a new management model for the innovation age.
For more information, please visit www.bbrt.org, email Peter Bunce, or call +44 1590 679803
BBRT, 745 Ampress Park, Lymington, Hampshire SO41 8LW, UK Tel: +44 1590 679803 Fax: +44 870 705 8799 Email: info@bbrt.org
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