March 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
• BBRT Research News
• The Toyota Crisis and Beyond Budgeting

21-23 April 2010: BBRT North America 9th Annual Conference, Dallas, TX, USA

This three-day conference will empower you with the knowledge of the current practices of business forecasting and Beyond Budgeting implementation, as well as techniques for financial planning executives to contribute in the planning and achievement of strategic goals and objectives. You've survived, now learn how to thrive in this volatile world.

Conference highlights:

• Largest Assembly of Beyond Budgeting Implementers Ever!
• Meet the authors of Future Ready: How to Master Business Forecasting and hear highlighted examples from Unilever, Southwest Airlines & American Express
• Case Studies from BBRT member companies, Elkay Manufacturing & TW Telecom
• Special interest group breakfasts: Healthcare, Lean Operations, Utilities
• Networking opportunities each day

For the detailed agenda and to register go to: http://www.regonline.com/bbrtconference2010

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

BBRT INSIGHTS research series

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

What you can learn about change from three ‘thought leaders’

Abstract: Leading major change programs in large organizations is notoriously difficult. It took Jack Welch all his time as CEO at GE (around 20 years) to make an impression on its corporate culture. So what are the key lessons we need to learn? This paper focuses on three highly acclaimed thought leaders (John Kotter, Rosabeth Moss Kanter and Edgar Schein) who have witnessed change management efforts in hundreds of organizations over decades and written extensively on the subject.

BBRT members can download the full papers from the BBRT Members' Community (formerly Private Forum) at www.bbrt.org/online. Join the BBRT to obtain this and previous papers – contact Peter Bunce at peterbunce@bbrt.org, or Heather Bryce at heather@theplayergroup.com

Toyota is an exemplar case for BBRT, however, the recent crisis at Toyota may cause you to wonder if it is still an exemplar and if so why. Firstly, Jim Collins points out in his new book “How the Mighty Fall”[1], companies grow great by doing things very well and having great principles, but they can fail by not sustaining this and going for other objectives that are not part of their ethos. In Toyota’s case it means that there is nothing intrinsically wrong with the Toyota Way or the Toyota Production System, it’s just that they failed to follow this in a dash for growth
 
The Lean Institute has recently made us aware that in his latest Lean Management Column John Shook continues to explore Toyota’s quality crisis in an in-depth conversation with author and Professor Takahiro Fujimoto of the Manufacturing Management Research Center, University of Tokyo. Fujimoto is a long-time Toyota observer who conducted research at Harvard Business School with Kim Clark on Toyota’s product development system. John Shook used to work for Toyota in Japan.
 
In this interview Prof. Fujimoto states that “if there is one primary reason for the crisis, it is that this overwhelming complexity exceeded Toyota’s organization capability.”
 
The interview is well worth reading and you can do this at: http://www.lean.org/shook/. Look for “Toyota Troubles: Fighting the Demons of Complexity”
 
It also appears that Toyota became arrogant about its fabled quality and believed that they couldn’t have any quality issues. They also seem to have switched from just focusing on the customer to striving to be the largest car maker in the world, and look where that got GM! Even before the crisis at Toyota, Akio Toyoda, the new CEO was trying to shake things up by telling the staff that Toyota was already at stage 4: grasping for salvation in Jim Collins’ five stages of decline. The recent crisis underlines this.
 
There are many lessons we can all learn from Toyota, both past and present, but clear one is that trying to be the biggest or the largest can be a fool’s game. The only thing that matters is focusing on the customers to ensure that your return on equity (or profit) is the best it can be and higher than your competitors, then you stand a better chance of a sustainable future.


[1] Collins, J. (2009) How the Mighty Fall and why some companies never give in. Random House Business Books, London

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