BRAIN FOOD: Matters for the mind to chew on - It just might work - Beyond budgets

BRAIN FOOD: Matters for the mind to chew on - It just might work - Beyond budgets - Are you suffering budget blues, both in doing and meeting the wretched things? Jeremy Hope and Robin Fraser, authors of Beyond Budgeting, have a simple solution. Scrap them! No targets for spending and selling means no blasting for shortfalls. Yet control isn't lost: use rolling five- to eight-quarter forecasts of key variables (say, orders, sales, costs and capital spending). Motivate via key performance indicators (such as profits, cashflow, cost ratios, customer satisfaction and quality), measured against internal or external peer groups. In Harvard Business Review, the authors claim that this leads people to outdo themselves, and that beyond-budget companies create more value, while saving oceans of time and mountains of money.

by
Last Updated: 09 Oct 2013

Are you suffering budget blues, both in doing and meeting the wretched things? Jeremy Hope and Robin Fraser, authors of Beyond Budgeting, have a simple solution. Scrap them! No targets for spending and selling means no blasting for shortfalls. Yet control isn't lost: use rolling five- to eight-quarter forecasts of key variables (say, orders, sales, costs and capital spending). Motivate via key performance indicators (such as profits, cashflow, cost ratios, customer satisfaction and quality), measured against internal or external peer groups. In Harvard Business Review, the authors claim that this leads people to outdo themselves, and that beyond-budget companies create more value, while saving oceans of time and mountains of money.

Tags:
How To

Find this article useful?

Get more great articles like this in your inbox every lunchtime

35 Women Under 35 2020: Nominations open

Management Today's 35 Women Under 35 showcases the country's rising stars in business. Here's how...

Practical steps for breaking silos

Briefing: Adam Williams, former CEO of influencer marketing agency Takumi, shares what he learned about...

The Power 50: Proof that you can be a part-time CEO

Just a few years ago, executives were reluctant to admit they worked part-time for fear...

The 9 worst things a leader can say

Actions may speak louder than words, but words can still drop you in it.

Why you overvalue your own ideas

And why you shouldn't.

When spying on your staff backfires

As Barclays' recently-scrapped tracking software shows, snooping on your colleagues is never a good idea....