Kim Warren on Strategy

Strategy insights and living business models

Beyond budgeting

Great presentation on Beyond Budgeting at the Perf Mgmt Assn in Cambridge by head of reporting at Statoil. A small group of top corporations [see Linked-In] including names like Google, Telenor, Toyota are junking the whole idea of annual budgets and devolving continuous target-setting to teams. If I understood correctly, in principle any team can change any target, and any performance indicator, at any time, for any reason – the control being credibility with their peers, since every team’s plans and targets are visible to everyone. Statoil’s performance against its peers sure suggests that something special is happening there! This, surely, is what a modern-day strategy process should support – new opportunities, threats, initiatives and challenges emerge constantly, and those adaptive targets should be emerging from evaluation of those changes. If not, then any changes to targets risk being made purely by what teams happen to notice and respond to … and what a perfect fit with Strategy Dynamics, whose working business models continually update history with anticipated futures, and can test any and all impacts and responses, in as much detail as management wants.

Strategy Dynamics Essentials

Strategy Dynamics Essentials book cover

Strategic Management Dynamics

Strategic Management Dynamics - cover image