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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 global web site at www.bbrt.org.
What's in the Newsletter
18-20 April 2012: BBRT North America Annual Conference, Houston, Texas, USA
For more information and to register go to: www.regonline.com/bbrtconference2012
14-15 May 2012: BBRT European Region Members’ Meeting, London, England
The next BBRT European Members’ Meeting will be held on 15 May 2012.
For more information contact Peter Bunce
Other events can be found at: http://www.bbrt.org/events.html
“Beyond Performance Management” – Jeremy Hope and Steve Player
Demystify all those performance management tools, and pick the right ones for your company. In “Beyond Performance Management, Jeremy Hope and Steve Player offer answers, critically reviewing forty well-known management tools and practices, from mission statements, balanced scorecards, and rolling forecasts to key performance indicators, Six Sigma and performance appraisals.
Hope and Player help you to select the right frameworks and approaches based on your organization's needs, then offer guidance on implementing each one and extracting its maximum value. For each of the forty tools and practices they review, the authors explain:
With its rigorous analysis and solid, practical advice, Beyond Performance Management helps tune out the background noise about performance management tools so that you can select the ones your organization needs.
This was Jeremy Hope’s last book, as he very sadly passed away in September
2012. He will be greatly missed, but he has left a legacy through his role in
articulating more effective ways to manage in the world where we all live. His
work will live on through his writing, including his six books. His words and
insightful thinking will continue to guide organizations for generations to
For more information on “Beyond Performance Management” and to order a copy go to: http://www.bbrt.org/resources/bbbook.html#book8
“The Leader’s Dilemma” - Jeremy Hope, Peter Bunce and Franz Röösli
“The Leader’s Dilemma: How to build an empowered and adaptive organization without losing control” by BBRT Directors Jeremy Hope, Peter Bunce and Franz Röösli is about re-thinking how we manage organizations in a post-industrial world, the so-called creativity age, where innovative management models represent the only source of sustainable competitive advantage.
Leaders investigating Beyond Budgeting often ask how they can maintain “control”, or monitor what is happening in the organization when it becomes more empowered and adaptive. This thinking stems from the classic “command and control” approach to management where decision-making is somewhat centralized. Targets, plans, budgets, resources and controls flow down the hierarchy in the form of annual instructions and subsequently flow back up again in the form of results.
The “Leader’s Dilemma” explains how to move to being an organization that has few layers of management and strategy and key decisions are devolved to front-line teams have the scope and authority to respond rapidly to emerging threats and seize new opportunities as they arise. Fixed plans and budgets are usually replaced with more flexible systems, including quarterly business reviews and light rolling forecasts. The glue that holds the organization together is fast, open and transparent information systems.
To find out more about the book and to order a copy go the book web site at www.leaders-dilemma.com
We are delighted to announce that the following organizations have joined the BBRT since the last Newsletter was published:
Bjarte Bogsnes, Statoil and BBRT Chairman has won the MIX Beyond Bureaucracy Challenge with his story “Taking reality seriously - towards a more self-regulating management model at Statoil”, which is about Statoil's developments towards a self-regulating management model. Here are some quotes from the story by the CFO and CEO of Statoil:
CFO Torgrim Reitan: "We could easily put in place a cost program instructing all business areas to reduce costs by a given number. However, I believe such a measure would work against our efforts to build a cost-conscious culture. If we want to become more fit, a crash diet does not work. It takes a change of lifestyle. I believe Statoil is made up of competent, responsible and commercially oriented people who will make the right cost decisions. This means always working hard to reduce bad cost, while protecting good cost. You know better than me what these are and where they are". CEO Helge Lund: "We have a management model which is very well-suited to dealing with turbulence and rapid change. It enables us to act and re-prioritize quickly so that we can fend off threats or seize opportunities. This is much more difficult in a traditional 'budget world'."
To read the full story go to: http://www.managementexchange.com/story/taking-reality-seriously-towards-more-self-regulating-management-model-statoil
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 bigfatfinanceblog.com
The BBRT Performance Management Tools research series
The following papers have been circulated to BBRT members since the last Newsletter:
Customer Value Proposition
Abstract - Customer value propositions help leaders to decide which strategic position to take. There are three classic value propositions: product leadership, operational excellence and customer intimacy. Companies need to focus on one of these and ensure that their processes and metrics underpin them. But few firms do this well leading to strategic confusion and poorly aligned processes. We will look at how the best organizations have clearly defined value propositions and how they use them to beat the competition.
Customer Relationship Management
Abstract - Customer relationship management (CRM) models aim to more clearly identify what people need to do not just to satisfy customers but also to build their loyalty and profitability. A whole software industry has risen from nowhere to grab a slice of this market. But it has failed to understand a crucial point. Companies need to make customers want to do business with them instead of trying to sell them products and services they don’t want to buy. That’s why the vast majority of CRM systems never recover the costs they absorb. We will look at how CRM systems can be used to support strategy rather than just act as a more sophisticated sales tool.
Strategic and Profitable Customers
Abstract - Strategic and profitable customers are the ones that every organization wants but accounting systems are hopeless at telling managers which they are (and there aren’t usually many of them). Managers need to systematically evaluate their customers and decide which ones deserve the ‘satisfaction’ dollars and which don’t. But few organizations do this well. We will suggest some simple techniques that can add huge amounts of value.
The BBRT research papers and case studies are delivered to BBRT members on a regular basis. BBRT members can download the full papers from the BBRT Members’ Community. Join the BBRT to obtain these and previous papers – contact Peter Bunce at email@example.com, or Heather Bryce at firstname.lastname@example.org
To read the full article go to: www.bbrt.org/Newsletters/files/CFO_Nov2011_Forecasting.pdf
The Bank That Time Forgot
Handelsbanken is one of BBRT’s earliest cases, but still the most complete in terms of being an empowered and adaptive organization. Recent articles and references show that this is not an “old” case; the Handelsbanken case is as fresh as ever. Handelsbanken still pursues its management model relentlessly and as the following excerpts show, with spectacular success. Why don’t the other banks get the message and follow their example. Perhaps if they did we would a more stable banking system and fewer complaints about banker’s bonuses!
According to The Times (16 February 2012) Handelsbanken is the bank that time forgot where old-fashioned values have sparked a rise in profits. It is a bank that shuns executive bonuses and does not reward its staff according to sales targets. Its “church spire” lending principle means that branch managers personally approve almost every loan. It has just reported a 66% rise in UK operating profits to £61.4 million on a 29% increase in revenues to £163 million. Compare this with Royal Bank of Scotland’s loss of £2 billion in 2011, up from a loss of £1 billion in 2010. It was the only Swedish bank that didn’t need a hand-out from the Swedish Government during the financial crisis. To read the full article go to: http://www.thetimes.co.uk/tto/public/profile/Miles-Costello.
In their recent book “Masters of Nothing”, Matthew Hancock and Nadhim Zahawi explore the trust we place in bankers. They quote a recent survey in Germany that found that 22% of people would least like a banker as a friend. This was only 2% behind them wanting a convicted criminal and 6% behind a prostitute. They quote Handelsbanken as an example that bucks this trend. They point out that “the Swedish bank has devolved responsibility to branch managers, so that tailored customer service is at the heart of the bank’s business model. It boasts top rankings for customer satisfaction and has shown higher profitability than its average competitors. The empowered bank managers use their discretion and judgement to deal with clients that they know, while clients are able to deal with bankers they trust”.
To find out more about the book go to: http://www.mastersofnothing.co.uk/index.php
These two examples show why Handelsbanken has always been a star case and a great example of Beyond Budgeting.
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
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Tel: +44 1590 679803 Fax: +44 871 266 4125 Email: email@example.com
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