1. What is Beyond Budgeting?
Bjarte Bogsnes
Vice President - Performance Management Development
Chairman - Beyond Budgeting Round table Europe
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2. Managing traffic performance - one alternative
Who is in control?
Based on which
information?
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3. Managing traffic performance
- another alternative
Who is in control?
Based on which
information?
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4. Which is most efficient?
Which is most difficult?
In which are values most important?
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5. The world has changed –
what about the way we lead and manage?
Business
environment
Dynamic
Traditional
Stable
management
”X” ”Y” People

6. We must change both processes and leadership
Processes
Relative and directional goals
Dynamic
Dynamic planning, forecasting
and resource allocation
Holistic performance evaluation
Beyond Budgeting
Rigid, detailed and annual Values based
Stable
Rules-based micromanagement Autonomy
Centralised command and Transparency
control Internal motivation
Secrecy, sticks and carrots
”X” ”Y” Leadership

7. 7
Some of the companies on a similar journey
Europe’s most
cost effective
universal bank

8. The Beyond Budgeting principles
Change in leadership Change in processes
1. Values - Govern through a few clear values, goals and 7. Goals - Set relative goals for continuous improvement,
boundaries, not detailed rules and budgets don’t negotiate fixed performance contracts
2. Performance - Create a high performance climate 8. Rewards - Reward shared success based on relative
based on relative success, not on meeting fixed targets performance, not on meeting fixed targets
3. Transparency - Promote open information for self 9. Planning - Make planning a continuous and inclusive
management, don’t restrict it hierarchically process, not a top-down annual event
4. Organization - Organize as a network of lean, 10. Coordination - Coordinate interactions dynamically, not
accountable teams, not around centralized functions through annual planning cycles
5. Autonomy - Give teams the freedom and capability to 11. Resources - Make resources available as needed, not
act; don’t micro-manage them through annual budget allocations
6. Customers - Focus everyone on improving customer 12. Controls - Base controls on relative indicators and
outcomes, not on hierarchical relationships trends, not on variances against plan
8 - Classification: Internal 2011-08-15

9. Simple is not the same as easy …
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10. Implications for leadership
• More autonomy and flexibility
but also higher accountability for results
• Use your autonomy
don’t delegate upwards
let it pass on to your teams
• Don’t give up if someone misuse trust
but react firmly on those who do
10 Classificati
on: Internal

11. Questions or comments - now or later?
Bjarte Bogsnes
bjbo@statoil.com
+ 47 916 13 843
Twitter @bbogsnes
Beyond Budgeting Round Table
www.bbrt.org
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12. Want to hear more?
1. The problems with traditional management
2. The Beyond Budgeting model
3. The Borealis case
4. The Statoil case
5. Implementation advice
Out on Wiley (US)
Available from e.g. Amazon.co.uk
(Now available in Russian and Japanese)
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