Beyond Budgeting in London
On March 21-22, the 59th European was organized BBRT meeting, this time in London. The program offered a number of successful internships from companies that have departed from the traditional budget process as well as research and ideas on governance and management adapted to today's reality.
Day one, in the usual order, the members gathered for an interactive workshop with the purpose of exchanging experiences and together developing ideas and concrete working methods.
Day two began Yuri of Spirit, author of the book ”Exponential organization", dealing disruptive organizations and how we see what is happening, but it is too late to react and seek change. Examples of events are the powerful impact of digitalization on consumption patterns and new generations' entry into the labor market. Yuri van Geest thinks that today's organizations need to be resilient, ie have a developed ability to deal with and manage disturbances and uncertainty.
Then we got a deeper understanding of how Buurtzorg controls their operations. Buurtzorg started its business in 2007 and today consists of about 10,000 nurses / under-nurses working in about 900 independent and self-managing teams. The company has no managers and the staff consists of 50 people, plus 18 coaches who support the teams. The result of Buurtzorg's model speaks for itself with satisfied users as well as employees as well as financial results that have meant a saving for the Dutch state of 35-40 percent compared with previous years. Buurtzorg has also been awarded the best workplace in the Netherlands in recent years.
Today's second internship case was Consilium Marine Technology, which made a fantastic trip, where the development of the control model was an important success factor. Consilium is a micro-multinational company with approximately 700 employees and with a turnover of approximately 1.5 MDR USD. The company has 54 sales offices in 23 countries. Production and research are carried out globally, but the largest business is in Gothenburg. The challenge is to manage many cultures, languages, currencies and dynamic demand. Today, the company is governed by principles of simplicity, where reality outcomes and rolling forecasts / simulations are used as the main decision basis. The results were immediately apparent after the change and management today experiences a higher degree of control where the control model serves as a lever for better business.
The third case of traineeship consisted of Savings Bank 1 and a description of how the organization works today, 10 years after they left the budget. The participants were given a historical look back at a development where for several years the bank was ranked number 1 in Norway for the key figure "Return on Equity". In 2015, Sparebank 1 abolished the bonus system altogether. The feared risk that performance would deteriorate or that employees would quit has not occurred. The bank is continuing to develop its governance model and in line with new employees and changes in the outside world, it is a job that will continue.
Next speaker on the program was Steve Morlidge who presented his book - A little book about Beyond Budgeting - which summarizes almost 30 years of research and implementation of Beyond Budgeting. Morlidge notes that Beyond Budgeting delivers results from a human perspective, develops processes and delivers better financial results through the governance and management process that creates dynamic and adaptable organizations.
A packed meeting day ended Julian Birkinshaw, Professor of Strategy and Entrepreneurship at the London Business School. Birkinshaw researching within Management Innovation presented their new book ”Fast / Forward". The purpose of the book is to show how different types of organizational forms fit different well under different conditions. Today's changing world requires a new way of looking at how companies can deliver their strategy. Birkinshaw believes that the ability to fight complexity with simplicity is a success factor. This may require new employees and new processes. All with the aim of building organizations that feel secure in the complex reality.
If you are interested in hearing more about the meeting in London or about the Beyond Budgeting network, you are most welcome to contact Knut Fahlén.
031-761 60 10