Webinar on Budgetless Governance

1company regularly arranges webinars on issues related to Business Controllers. February 22, it's time again. This time it is Malin Wennebro and Knut Fahlén from Ekan who are lecturers. The presentation is about Budgetless Governance - something that Jon Johnsson from Atlas Copco will address in his presentation at the Business Management 2.0 conference on March 13. We asked some questions to Malin Wennebro about what to expect from the webinar.

The role of the budget and non-role as a policy instrument have been open for discussion for many years. But what we are seeing now is that as the world around us becomes more fast-moving and the market complexity increases, interest in thinking about new forms of management and governance is growing. What you are primarily looking for are management processes that better follow the business rhythm and which enable you to act faster on new conditions. From the survey we conducted among Business Controllers in the fall of 2011, it appears that as many as 67 % of the companies see a great need for development in the field of simulation and forward-looking analysis. The recent cyclical fluctuations and general turbulence in the rest of the world are an explanatory factor. Another is that there is a large untapped potential in the amount of real-time data we now have available as a result of IT developments. With all that we know about reality, as it looks right now, why should we continue to rule according to how we thought it would be a calendar year back in time? Of course, the solution is not just about releasing the budget, but in the way the budget is used, in many cases there are lock-in effects that make it difficult to prioritize resources and adapt to reality. In addition, many people today ask whether all the time spent in the budget processes corresponds to what you get in value creation.

Governance without budget is a more difficult form of governance that requires more from both managers and the organization at large. It requires the ability to continuously make business decisions based on relevant decision-making evidence. Arguments like "I don't have room in my budget" is never a reason to do nothing. The change is to a lesser extent about ending with something and much more about starting to do something else. A common approach is to distinguish the various purposes of the budget and to find new forms of goal management, forecasting and decisions on how resources should be allocated and invested in order for the business to continue to develop according to set goals.

Since the late 1990s, there has been an international network of companies and organizations with a shared ambition to change their management models and tools to better operate in today's dynamic business environment. Within this network, Beyond Budgeting Roundtable (BBRT), there are a number of examples of companies that have succeeded with new forms of governance. Svenska Handelsbanken is one of the forerunners. Other examples are Southwest Airlines and Scandinavia's largest company Statoil. You can read about Statoil's experiences in the book Implementing Beyond Budgeting by Bjarte Bogsnes, who is also chairman of BBRT Europa. Experience that the members of BBRT testify to is that it is basically about changing the management philosophy and for many companies it means in practice a decentralization of decision-making. Important puzzle pieces are transparency, trust and trust.

During the webinar, we will describe the challenges that companies are highlighting today and provide examples of approaches to start development work towards more proactive forms of management and governance. Since this is in most cases a major change effort, we will also touch on what is required to bring about a change in behavior and how different functions and roles in the companies are affected by the work.

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