BBRT - Beyond Budgeting Roundtable Introduction
When the Beyond Budgeting Round Table (BBRT) was established over ten years ago its vision was to find steering mechanisms that could replace budgeting and help to make organizations more adaptive to change. But its members quickly realized that management processes (the way we set goals, strategy, plans and budgets, allocate resources, coordinate actions, and measure, reward and control performance) with budgeting at their core were not neutral in terms of management thinking and behavior. In fact, these processes were designed to enable leaders to command and control the actions of front-line people. Head office did not want managers to think or act on their own. In fact, they didn’t want any surprises. So if leaders now wanted managers to be more responsive, innovative and ethical, what did they need to change? The answer was not about fixing a few problems. It required a new way of thinking about management. It meant designing a new coherent management model.
Over the past ten years we have studied many organizations that have changed their management models and built organizations that are not only more responsive, innovative and ethical but also operate with lower costs and consistently beat their peers on a wide range of indicators (what we call ‘beyond budgeting’ organizations). When we looked at the common threads we saw that their leaders had adopted a clear set of guiding principles underpinned by innovative management processes. These two elements were in harmony with each other and were in stark contrast to the traditional ‘command and control’ model that most organizations still use today. While many of our early cases had visionary leaders with deeply held beliefs who had implemented these models from the inception of the business, others had brought in such leaders to turnaround their failing organizations.
More recently, the ‘beyond budgeting’ community has spawned many transformation cases and we have been learning with their leaders what actions are required to change management models. There is of course no ‘one-size-fits-all’ recipe but there are clear guidelines that successful transformation cases have followed.