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June 2010

Thank you for your interest in BBRT. 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 global web site at www.bbrt.org.

What's in the Newsletter

• BBRT Upcoming Events
• New BBRT Members’ Community web site
• BBRT Research News
• What went wrong with Toyota – according to Prof. Tom Johnson
• Future Ready: how to master business forecasting  - New Video

• 16-18 August 2010: BBRT Personalized Training www.regonline.com/bbrttraining
• 11-12 October 2010: BBRT European Members Meeting, London, England
• 17-20 October 2010: LESS 2010, International conference on lean enterprise and software systems. Includes a Beyond Budgeting track. www.less2010.org

Also see the BBRT Calendar at www.bbrt.org/events

BBRT members have access to a private web site that contains all the proprietary material available to members only. This includes:

• Research reports
• Case studies
• Presentations given at meetings
• White papers
• BBRT Beyond Budgeting Implementation Guide (Corporate members only)

This web site has now been revised using an open source Content Management System (CMS) called Drupal, which provides the following added benefits:

•  Members can add comments to any page in the web site
• In the Implementation Guide, members can leave comments on each page (they can't change the content)
•  In the Implementation Guide each page and section has a "Printer Friendly" link at the bottom, so it's much easier for people to print the guide if they so wish
• The site now includes forums on any subject we wish. Currently holders for new site, Performance Management Tools research series and each of the 12 principles have been set up
• The login is smoother than before. It is currently set so that all new accounts are blocked until we unblock them

This web site has been revised and now be found via the link in the top right-hand corner of the BBRT web site (www.bbrt.org). Access is restricted to people from BBRT Member organizations, so please only apply for an account if your organization is a BBRT Member.

If you would like to gain access to this private web site then join the BBRT. For information about membership email Peter Bunce, or call +44 1590 679803, email Heather Bryce or call +1 214 239 0155.

Finance Transformation Blog

Steve Player (BBRT Director North America) is now authoring a Finance Transformation blog for Business Finance Magazine. You can connect to this blog at www.bigfatfinanceblog.com

The BBRT Performance Management Tools research series

The following paper has been circulated to BBRT members since the last Newsletter:

Mission and Vision Statements

Abstract - Mission and vision statements have become popular in recent years as managers look to build a high performance culture; provide a clear set of principles and values that provide a framework for coherent decision-making across the company; clarify trade-offs and priorities; and provide clear boundaries that enable the devolution of decision-making. The trouble is that most offer meaningless words that focus on lofty goals rather than deal with trade-offs between stakeholders such as employees, customers and shareholders. Consequently, despite the time and effort involved, most end up being ignored.
 

BBRT members can download the full papers from the BBRT Members' Community web site. Join the BBRT to obtain this and previous papers – contact Peter Bunce at peterbunce@bbrt.org, or Heather Bryce at heather@theplayergroup.com

In a recent article on the Lean Edge web site (http://theleanedge.org) Prof. Tom Johnson, co-author of “Profit Beyond Measure”, wrote a brilliant article about what may have gone wrong at Toyota. In his article “Financial results such as revenue, cost and profit are by-products of well-run human focused-processes”, he postulates that in his opinion the cause of Toyota’s crisis is found in its very recent surrender to Wall Street pressure to grow continuously, as virtually all large publicly-traded American businesses have attempted to do for the past 30 years or more. This includes thos that pursue “lean” practices.

He maintains that the flaw in this finance-oriented growth strategy is the belief that profitability improves by taking steps aimed at increasing revenue and cutting costs. Prof. Johnson queries the approach taken by most Western companies to “lean” and the way that they have implemented it. Fundamental to this is differences between Western and Toyota management practices, particularly in the way each group thinks about “cost”. He concludes the article by saying “This is why for years and years I have said that management accounting (and its lean counterpart “lean accounting” is a meaningless concept – an oxymoron in fact. You can use accounting quantities to describe, but never to explain, understand or control.”

To read the full article (it's excellent) go to: http://theleanedge.org/?p=462

Rolling forecasts are often at the heart of the new "control" system in Beyond Budgeting implementations. Yet many managers have little knowledge about good forecasting practice and how to make it a truly effective management tool. Steve Morlidge and Steve Player have written a book "Future Ready - how to master business forecasting" that does just that.

Watch a video of Steve Morlidge discussing this new book (http://www.youtube.com/watch?v=tk_GNveXIIo)

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, email Heather Bryce or call +1 214 239 0155