BBRT - Beyond Budgeting Roundtable

BBOs are great places to work, do business with and invest in. But how can you learn from them? What should be your vision? Where should you start? How do you change? While creating a vision is easy, execution is difficult. The trouble is that many leaders set out in the wrong direction. Many leaders set off on their change journeys with no clear direction and they are sure to get somewhere, but often it is the road to decline rather than the road to success.

One of the problems is that most organizations are hard-wired for ‘command and control’ rather than soft-wired for self-regulation. A beyond budgeting management model involves high levels of trust and accountability and this means devolving more responsibility for strategy, planning, forecasting, decision-making and control to front-line teams. It is a tougher way of managing as the old ‘excuse’ culture based on budgets is replaced with a new ‘accountability’ culture based on continuous relative improvement. There are no hiding places for under performing managers.

The pathway

Experience in the BBRT shows that you need to carefully think through your case for change and vision for change before taking action. These are the ‘thinking’ and ‘design’ steps that the BBRT advocates:

1. Build an urgent case for change. Transformation leaders use the external drivers of change as a platform for building a case and vision for change within the organization. These external drivers are often reinforced by internal drivers usually caused by poor performance and equally poor management.
2. Agree a compelling vision for change. The next step is to consider how management behavior needs to change in response to these drivers. In other words, how do leaders want managers to respond positively to these drivers and build a beyond budgeting organization?
3. Apply the right mental models. The third step is to rethink the mental models that determine the organization’s cultural beliefs. Leaders know that unless they tackle these models early in the process that transformation will be doubly difficult (if the wrong mental models are used, leaders will likely choose the wrong actions).
4. Take the right actions for change. The fourth step is for leaders to take the right actions that enable and encourage the desired behavior and lead to a beyond budgeting model.