In my last blog, I promised to give you some tips about how to introduce some Beyond Budgeting ideas into your business to help make it more flexible and reduce the gaming behaviour associated with the budgeting game. Traditional budgeting has three major weaknesses:
Steve Morlidge
Steve Morlidge has 30 years of practical experience in designing and running performance management systems in Unilever, including three years as the lead of a global change project. He is a former chairman of the European Beyond Budgeting Round Table and now works as a management thinker, writer and speaker, drawing on his years of experience at the leading edge of performance management thought and practice.
Steve Morlidge published Future Ready: How to Master Business Forecasting, John Wiley, 2010, ‘The Little Book of Beyond Budgeting’ and ‘The Little Book of Operational Forecasting’ through Matador in 2017 and 2018 respectively. He is on the editorial board of Foresight, a forecasting practitioner’s journal published by the International Institute of Forecasting to which he regularly contributes. He is also a cofounder of CatchBull, a supplier of forecasting performance management software and sits on the non-executive Board of the Beyond Budgeting Institute.
Steve Morlidge is a visiting fellow at Cranfield University, Bedfordshire, UK and has a PhD from Hull Business School in Yorkshire, UK focusing on the application of systems concepts to the design of complex organizations. He completed his BA with honors, and he is a qualified management accountant (CIMA).
He can be reached at steve.morlidge@satoripartners.co.uk or steve.morlidge@catchbull.com.
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In the last blog, I described how it is possible to implement Beyond Budgeting in a step-by-step fashion. If you choose to go down this route you will become increasingly uncomfortably aware of a disconnect between Beyond Budgeting style processes and the rules and routines that govern normal business life in a traditional organisation. In the brave new world I have described, senior managers perched high in the organisational pyramid can no longer use targets and incentives to remotely control the activities of their subordinates and measurement systems no longer highlight deviations from pre agreed plans and budgets and trigger ‘corrective action’. Resources are allocated continuously and an annual set piece planning ritual cannot effectively coordinate activities in an organisation that is continuously adapting to events.
I’d like to claim that I am not easily annoyed….but that would be untrue. And one of the things that are guaranteed to irritate me is glib statements from people who claim to be experts – particularly if it is part of an act to get people to buy something.
It is difficult to think of another business process that is as universally detested as annual budgeting. The list of complaints will be familiar to anyone who has run a budget process or has been subjected to one…and that probably means everyone reading this article.