Mar 26, 2023
Bio
Bjarte Bogsnes has a long international career, both in Finance and HR. He is a pioneer in the Beyond Budgeting movement and has been heading up the implementation of Beyond Budgeting at Equinor (formerly Statoil), Scandinavia’s largest company. He led a similar initiative in Borealis in the mid-nineties, one of the companies that inspired the Beyond Budgeting model. He has helped numerous other companies globally getting started on a Beyond Budgeting journey.
Bjarte is Chairman of Beyond Budgeting Roundtable (BBRT). He is a popular international business speaker and Beyond Budgeting coach, and a winner of a Harvard Business Review/McKinsey Management Innovation award. Bjarte is the author of "Implementing Beyond Budgeting - Unlocking the Performance Potential", where he writes about his almost thirty years long Beyond Budgeting journey. His new book “This is Beyond Budgeting – A Guide to more Adaptive and Human Organizations” with a foreword by Gary Hamel is just out.
Bjarte is available for speaking engagements and select consulting work through Bogsnes Advisory.
Episode Highlights
04:33 New book ‘This is Beyond Budgeting’
07:40 Beyond Budgeting
16:25The issue with the current performance appraisal process
19:45 The case for change
31:00 Becoming braver
33:50 ‘Losing’ control
49:10 Reflect on the risk picture
Books
· This is Beyond Budgeting: A Guide to More Adaptive and Human Organizations by Bjarte Bogsnes This Is Beyond Budgeting: A Guide to More Adaptive and Human Organizations: Amazon.co.uk: Bogsnes, Bjarte: 9781394171248: Books
· Implementing Beyond Budgeting: Unlocking the Performance Potential by Bjarte Bogsnes Implementing Beyond Budgeting: Unlocking the Performance Potential: Amazon.co.uk: Bogsnes, Bjarte: 9781119152477: Books
· Maverick by Ricardo Semler https://www.amazon.co.uk/Maverick-Success-Behind-Unusual-Workplace/dp/0712678867
· Humanocracy by Gary Hamel et al https://www.amazon.co.uk/Humanocracy-Creating-Organizations-Amazing-People/dp/B08F2TCKWN
· The Future of Management by Gary Hamel and Bill Breen https://www.amazon.co.uk/Future-Management-Gary-Hamel/dp/1422102505
Websites
· Beyond Budgeting Institute https://bbrt.org
· Bogsnes Advisory (Bjarte’s consulting firm) https://bogsnesadvisory.com
Social media
· LinkedIn: https://www.linkedin.com/in/bjarte-bogsnes-41557910/
· Twitter: @bbogsnes
Guest Intro (Ula Ojiaku)
Hello and welcome to the Agile Innovation Leaders podcast. I’m Ula Ojiaku. On this podcast I speak with world-class leaders and doers about themselves and a variety of topics spanning Agile, Lean Innovation, Business, Leadership and much more – with actionable takeaways for you the listener.
Ula Ojiaku
Hello, Bjarte. Thank you for being my guest on the Agile Innovation Leaders Podcast, it's a great honour. I remember meeting you for the first time last year in Copenhagen at the Beyond Budgeting Roundtable, and you kindly accepted. So thank you for being here today.
Bjarte Bogsnes
Thank you for the invitation.
Ula Ojiaku
Great. So could you tell us any experience that you might have had growing up, that would have led to where you are today?
Bjarte Bogsnes
Well, the author Douglas Adams, he once wrote that: “I might not have gone where I intended to go, but I think I ended up where I needed to be”, and that's basically the story of my life because it was in no way given that we should sit here today and talk about Beyond Budgeting, because my career started in a very different place. I'm a finance guy by education and after I finished my business studies, I joined a company called Statoil, it's today called Equinor, it's Scandinavia's largest company, it's an energy company, and my first management job in this company, the year after I joined, was actually Head of the Corporate Budget Department. So I have been heading up more budget processes in my career than I want to be reminded about in that job and in many other Finance Manager jobs in different, you know, jobs. I've been working abroad quite a lot for the same company. So I used to be a big fan of this way of managing, there is actually an interview with me from the company magazine at the time where I'm praising the brilliance of budgeting, and I hope that there are no more copies around. And another reason I like that quote from Adams is that I come from a teacher family. My parents were teachers, my sister was a teacher, so I was in the way, the black sheep in the family because I went for Business Studies. But these days I really feel that I'm back in the fold, because I feel that that is what I'm doing now, teaching, and trying to make a positive difference, just like my parents and my sister did.
Ula Ojiaku
So teaching, it seems like it's a full circle, but you wouldn't have gotten here without, you know, still going through that process of working in business.
Bjarte Bogsnes
No, I think I'm very glad I have that background because it means that I know what I'm talking about. I know most of the fix in the budget book and some of them are quite nasty, and so when I would discuss with managers, finance people and others then, I mean, I know the arguments, and I know how to respond. Another important part of this journey was that I am one of the few finance persons, I believe, who has also worked in Human Resources. I was heading up the HR function in a large European company for some years, and that experience was also a big eyeopener for me when it comes to the leadership, the people side of Beyond Budgeting, which is just as big as the kind of finance process side.
Ula Ojiaku
Nice. Now, I mean, we will be getting to talk about your book, which is This Is Beyond Budgeting, that was released this February, 2023. Congratulations!
<Ula holds up a copy of the book in view of the camera>
Bjarte Bogsnes
Thank you.
Ula Ojiaku
What I noticed was that the difference between This is Budgeting, I mean your, your second book and, Implementing Beyond Budgeting, which preceded this, this is actually a quicker read, you know, smaller, it seems like it was condensed and it was done on purpose. Could you tell us about this book, the main message?
Bjarte Bogsnes
Yes. Now, first of all, I mean, that is a correct observation. This is a shorter book, on purpose, and the simple reason is that we need to reach people, busy people, with limited time to read, and they don't have time to read bricks. So, yes, it is a shorter book, it is recapping some key messages from my earlier books, but there's also a lot of new stuff in it. I have learned a lot since the other book you've shown was published back in 2016. I've written a lot, I've worked with a lot of great organisations. So, again, a lot of new learning also. And I really do hope to reach, I did reach a number of executives, managers with my previous book, and I know, because of nice feedback from many of them. But there are so many more of them that still needs to hear this message. So that is why it's the shorter one. And I'm also very grateful and happy that Gary Hamel agreed to write the foreword. I mean, he is such an inspiration when it comes to management innovation and has been for such a long time. I mean, hearing Gary speak is simply mind-blowing. I mean, he is dynamite as a speaker and I think he's written a great foreword, and there are also some, quite some nice endorsements from important people in the agile community and kind of borderline agile community, Rita McGrath, Dave Snowden and Julian Birkinshaw, Jos de Blok, the founder of Buurtzorg. So I'm also very happy that these people took the time to read it and write these nice endorsements.
Ula Ojiaku
Indeed, we will go into some key points in the book for the listeners or viewers, they would have to buy it to go through it, to know what it's all about. But can you tell us, because there might be some people listening to this that don't know, what Beyond Budgeting is all about.
Bjarte Bogsnes
No, that's obviously an important question and let me start with saying that Beyond Budgeting is a somewhat misleading name, we know. It was, Beyond Budgeting was invented, developed 25 years ago, and back then there was nothing called agility, agile, or business agility, so if that label had been around at the same time, maybe that would've been the name of this. But it is basically about business agility. And, as the subtitle in my book states, it's about creating organisations that are more adaptive and more human, and Beyond Budgeting is very much about changing traditional management. But at the core of traditional management, you find not just the budgeting process, but also the budgeting mindset, built on the assumptions that the world is predictable and plannable and that you can't trust people. These are assumptions that we really challenge in Beyond Budgeting, because it isn't true. So if you want to change traditional management, you need to do something with the elephant in the room, the budgeting process. And that is something that, if you look at Agile, I think Agile has kind of avoided that elephant throughout all these years. It's been regarded as something unavoidable, a lower business, which isn't true, because more and more companies are skipping this way, or managing. And talking about Agile, I'm a big fan of Agile, but what I'm going to say now is not criticising Agile, but I think it would also help to explain what Beyond Budgeting is. I think part of the success of what I call early Agile has to do with its birthplace in software development, and how teams are working. And I think in those early years, I think what executives in big companies, what they observed and heard about Agile was better projects, faster projects, more value, more engaged people, and who can be against that, wonderful, I love it, come on guys, Agile is great. Then for obvious reasons, companies started to scale Agile, right? And at one level it kind of reaches the executives and has consequences, implications for these guys' beliefs and behaviours. And then it isn't that it wasn't that fun anymore. I think that's one reason why scaling Agile has been difficult. Another reason is that you can't scale Agile using the same language and tools and frameworks that did wonders back in those days. I mean, for executives who don't play rugby and don't know Agile, they might think that Scrum is some kind of skin disease, or Slack is about laziness or that Sprint is about running faster, or continuous delivery is about 24/7. Right? So, I mean we need a language here that these guys can understand and relate to, and Beyond Budgeting is providing that language. They might still disagree, but they understand what we are talking about. And the last issue here is that, again, Agile was not designed as a way to run an enterprise. So when you try to scale it, these holes in Agile become visible, like how do you manage resources? How do you do forecasting? How do you evaluate performance? How do you reward? Right? And these are the holes that Beyond Budgeting is filling, because, again, Beyond Budgeting was designed from day one as an Agile way of running an organisation. And that is why we never talk about scaling agile, because it comes scaled, it is scaled, right? But this is also why Beyond Budgeting in Agile is such a beautiful fit, and why so many companies on Agile transformation journeys are reaching out to us because they reach these insights and learnings and understand that there can be no true agile transformation without Beyond Budgeting.
Ula Ojiaku
That's an excellent overview of Beyond Budgeting. And I understand, you know, in Beyond Budgeting, there are 10 principles, and there is the leadership principles, if I may say, and then the management processes. Do you want to talk a bit more about this, please?
Bjarte Bogsnes
Yeah. So there're actually a 12 principles, and you're right, six of them are on leadership and six of them are on management processes, and if you look at what Beyond Budgeting is saying about leadership, it is not necessarily that unique. There are many other great communities and models out there saying similar things about leadership, right? Talking about purpose and autonomy, transparency, values, and so on. But very often these models and communities haven't reflected very much, it seems like, about what kind of management processes are needed to activate these leadership intentions, because what is often the case in organisations is that they might have the best intentions on the leadership side. They say the right things, they write the right things, but that doesn't help if the management processes are expressing the exact opposite use. Classic example, it doesn't help to talk loud and warm about how fantastic employees we have on board, and we would be nothing without you, and we trust you so much, but not that much. Of course, we need detailed travel budgets, right? This is hypocrisy, and people notice and the words become hollow, because the management processes has a different message. So that is why there is a strong focus in Beyond Budgeting on coherence between the two, between what is said and what is done, right. So I think that is one and very important aspect with Beyond Budgeting. The other is that, as I mentioned earlier, I don't think any other community out there has cracked the budget problem. The budgeting process is something that everybody complains about. It's maybe the most loathed corporate process out there, followed by performance appraisals, but again, it's kind of been left untouched until Beyond Budgeting came and offered great alternatives to this quite outdated way of managing because, it is fascinating, there are not too many other technologies applied in companies today that are a hundred years old, but that is the age of budgeting invented in 1922 by James O McKinsey, the founder of McKinsey Consulting, right. And I never met Mr. McKinsey, but I don't think he was an evil man. I actually think he had the best of intentions. I mean, he wanted to help organisations perform better. This was management innovation a hundred years ago, and it probably worked a hundred years ago, because the world was completely different, the quality and the capability, competence of people were very different, but today things have changed and that is something that our leadership and management models must reflect.
Ula Ojiaku
Okay, there's something you said, you know, the two things or two activities, that are probably most loathed in organisations would be the budgeting process and the performance appraisal. And you've talked a bit about the budgeting. So, for the performance appraisal, what exactly about it doesn't sit well with people?
Bjarte Bogsnes
Oh, that list is long. First of all, I mean, it's just like budgets, as I will come back to, has different purposes, so has the performance appraisal, I mean, one purpose is meant to be learning and development, that's a positive one, but another purpose is to determine rewards, right. So, if you are my manager and I'm coming in to a performance appraisal with you and if my mind is mainly on the reward side, the last thing I want to share with you is where I have learning and development needs, right? I want to brag about all my successes and how great I am and so on, and vice versa. So, kind of combining this in one process, with one outcome is meaningless, and also this focus on rewards and, which very often is about individual bonus, which is one of the problems in traditional management that Beyond Budgeting is strongly against, we believe in common bonus schemes, driven by joint performance instead of individual performance. So it is typically an annual event, right, an annual stunt, it's meaningless to talk about feedback and development once a year, that needs to happen much more continuously, right? So, I think budgeting is a bigger problem, it makes more damage, by all means. But performance appraisals come and the whole low performance management notion, it does almost as much damage. And by the way, that is a label I really dislike, performance management, right? Think about it. What are we really saying? Aren't we saying that if we don't manage your performance, there will be no performance, right? That is not a very positive message, and I also think there's quite a lot of illusion playing out here. I think our ability to manage performance, among knowledge workers in today's people and business realities is actually quite limited compared to what managers and HR people and some finance people often tend to think. So it's an awful label, and, you know, we need to stop thinking about managing people, we need to start thinking about how we can create conditions for people to perform, how we can enable performance, not managing performance.
Ula Ojiaku
That's a great point Bjarte. So what's the solution? What is the solution that Beyond Budgeting is going to offer? And the next one following it would be, how do we apply this?
Bjarte Bogsnes
Oh, most people actually who are blank on Beyond Budgeting, when they hear about this, they like it, they see that this makes sense. It's only common sense in a way, this is about taking reality seriously, and it is addressing so many of the pain points they experience working, especially in big companies. But then of course the next question is, well, how do we get started? And we have two general recommendations here. The first one is about the case for change, which simply means that the whole organisation, or as many as possible, has to understand that all those complaints about traditional management, including budgeting, the time it takes, the gaming, the narrow performance language, the outdated assumptions. I mean, these are more than irritating itches, right? These are symptoms of a big and serious problem, namely that this way of thinking, this way of managing originally meant to help organisations perform better is today doing the opposite. It has become more of a barrier than a support for getting out the best possible performance, and the more there is a common understanding of what kind of problems the organisation is trying to solve, the easier everything afterwards is. Because if you are unclear about that, I mean, how can you make your choices about alternatives, right? But the clearer the case for change, the better the problems are defined, the easier it is when you have a choice of design, should we go this way or this way? Well, which solution would best solve the problems they are trying to solve? So the case for change has to be created, a solid one, then getting started. We know that many, having seen the Beyond Budgeting principles for the first time, might feel this is a bit overwhelming, right? With all these bold ambitions around leadership, these major changes towards the traditional management processes. I mean, it is a mouthful, it is quite a comprehensive leadership and management model. And if some are kind of a bit scared, I can understand that. If that is the case, we have a very simple, tested, practical, logical way of getting started, which is more budget-oriented than Beyond Budgeting itself, but it is a great way to get started, and it is simply about asking a very simple question, namely, why do you budget? Right? What's the purpose of a budget? And most people that I've asked that question, when they have thought a little bit about that question, they actually realise that there are more than one purpose with a budget in a typical, and when I say budget, I mean more than project budgets, more than cost budgets, I'm talking profit loss, cash flow, balance sheet budgets, the whole finance definition. And the purpose of these budgets are the following. First, companies make budgets to set targets. It could be financial targets, sales targets, production targets, right? So that's one purpose. Second, companies and organisations use these budgets to try to understand what next year could look like in terms of profit and loss cashflow. So it is a kind of forecast of what next year could look like. So, that's the second purpose. The third purpose is resource allocation. The budget is used as a mechanism for handing out bags of money to the organisation on operational costs and on invests, and it might seem very efficient, practical to solve all three purposes in one process and one set of numbers. But that is also the problem, because what happens if we move into the budgeting process in a company, and upstairs finance want to understand next year's profit and loss and they start on the revenue side asking responsible people, what's your best number for next year? But everybody knows that what I'm sending upstairs will most likely come back to me as a target for next year and often with a bonus attached to it. And that insight might do something to the level or numbers submitted, and I think you know, which way those numbers will go, namely down. Moving to the cost side, operational cost investments. The same people, other people are asked, what's your best numbers for next year? But everybody knows that this is my only shot at getting access to resources for next year, and some might also remember that 20% cut from last year and that insight and that memory might also do something to the level of numbers submitted. And I can see you're smiling a bit, and a lot of people do.
Ula Ojiaku
I'm smiling because I'm just kind of thinking of incidents in past, you know, in past organisations that it has happened. You know, you just sandbag it and give a very high number, knowing that there might be a challenge.
Bjarte Bogsnes
And you're in good company when you're smiling, but at the same time, I mean, this is actually quite a serious problem, not just because it destroys the quality of numbers, but even more because it actually stimulates behaviour, which I would call at least borderline unethical. The road-balling, the gaming, the sandbagging, the resource hoarding, I mean, all the kind of behaviours that we wouldn't like to see between colleagues. At the same time, I'm not blaming anyone for behaving like this, right? Because then people are just responding to the system we have designed for them to operate in. So if we want to change behaviours, it's not about fixing people, it's about fixing systems, which again, will change behaviours. So that's the problem, three different purposes in one process, in one set of numbers. Fortunately, there is a very simple solution. We can still, and in many cases, should still do these three things, but we should do them in three different processes because these are different things. A target, that's an aspiration, it's what we want to happen. While a forecast is an expectation, it's what we think will happen whether we like what we see or not, right? Brutally honest, the expected outcome. And last but not least, resource allocation is about optimisation of what is often scarce resources. When we then have separated, then a target can be more ambitious than a forecast, which it typically should be. But the most important thing is that that separation opens up for big and important improvement discussions. We can now improve each of these in ways impossible when it was all bundled in one process and one set of numbers. So we can have great discussions around targets. How do we set better targets that really inspire and motivate people, without people feeling stretched? How can we set targets that are more robust against the volatility, the uncertainty, the complexity, and the ambiguity out there? Forecasting, how can we get the gaming and the politics out to the forecasting? And we don't need a million details here, we are looking at the future. There's uncertainty, which is a big difference on looking at the past through accounting, where details and decimals make sense and is often required. But looking at the future, there is uncertainty and that must have implications. So this isn't a good example of, in this stuff, we have to leave behind that accounting mindset that is applied for describing the past recounting, right? When we look at the future, then we need to accept the ambiguity, the complexity, and not just accept it, but embrace it. And last but not least, resource allocation. How can we find better and more intelligent, more effective ways of managing cost than what a certain Mr. McKinsey could offer us a hundred years ago, under very different circumstances? And this is the important discussion, that separation of purposes that just enables these improvement discussions. And in these discussions, having these discussions that is a kind of not scary organic backdoor into those 12 principles, especially in your leadership, right? Target setting, what really motivates people? Resource allocation, again, do we need detailed travel budgets, if we say we trust people? So, again, it is pure logic. I have yet to meet a CEO, a CFO, that didn't come up with that list of three purposes, didn't understand, when helped a little bit, that that's problematic, and didn't see that there are much better ways when you can improve each one separately. And last but not least, we can also then do something with the cadence, with the rhythm of each one. So now we can organise each of the three: target setting, forecasting, resource allocation, on a rhythm that not just reflects the kind of business we're in, but also the kind of purpose, right. So you would set targets or chase targets much less, I mean, not that often as you would change your forecast, and resource allocation is something that you would do all the time, right. So, and also another beauty of this approach is that when people tell me it's impossible to operate without the budget, then my response is, having explained this, that here we still do what that budget try to do for us, but because we have separated, we can do each one in so much better ways, right? And when people say, well, the bank want a budget, the reason why banks ask for budgets is that they have never really realised that there was something else to ask for. So if you can tell the bank, I won't give you a budget, but I will give you my targets and my reliable forecasts, the bank will be more than happy. So I'm spending a little bit of time on this because it is the more finance-oriented part of Beyond Budgeting, but it is a great way to get started. And I helped so many companies over the years and with the big majority, this is where we started out and what we observe over and over again, is in having those improvement discussions the first year, people are a little bit cautious about how radical shall we be, but then it turns out that things work. And what was scary today is not scary tomorrow because it did work, which means that the appetite for being braver increases, so we typically see that organisations get braver along the way, and when it comes to targets, some, after some years of setting better targets, actually decide to skip targets, right? They realised that they are absolutely able to create direction, create motivation, evaluate performance without traditional targets, some even skip forecasting. I haven't heard anyone skipping resource allocation yet that you need to have, but my point is that people and companies tend to get braver.
And a final important message, very few companies that have embarked on a Beyond Budgeting journey go back, very few. I don't need one hand to count the number, and the few who did go back, the reasons fall in two categories. Either a flawed implementation, typically, an unclear, weak case for change, or starting only with rolling forecasting. The other typical reason has to do with a significant change in top management at the very early part of the journey. That's actually something I've experienced myself.
Ula Ojiaku
Great explanation, Bjarte. So you mentioned, you know, about separating the budget into three distinct parts, the target, the forecast, the resource allocation. Now at the organisations where you've implemented this, did you get any resistance from, you know, the top level leaders, managers, because you know, traditionally whoever has the budget, who controls the money, tends to wield power in any organisation. Was there any resistance?
Bjarte Bogsnes
Well, I think there has been maybe more fear and confusion than outright resistance, even if the resistance sometimes is hidden behind those two. And of course, one word that keeps coming up over and over again when I discuss Beyond Budgeting with people is the word control, right? The fear, and the context is of course the fear of losing control, but the interesting thing with that word is that, when I ask people to be a bit more specific to define what they mean with control, after people have said cost control, actually many go quiet. They struggle with defining what they are so afraid of losing, and that is quite interesting. And if you look at Oxford Dictionary's definition of control, it is the power to influence people's behaviour or the course of events which, again, then for an organisation typically means controlling people and controlling the future. And again, those are the two assumptions that we challenge in Beyond Budgeting, because it is about not trusting people and thinking that the future is predictable and untenable and on control, what I often tell these people is that, yes, you will lose control, but the control that you lose are the bad controls. What you will get more of is good controls, and I wouldn't call that losing control. And one example of a good control in Beyond Budgeting is transparency, right? And let me give you one classical example of how it can be applied, ad this is a real example from a Swiss's pharmaceutical company called Roche, quite big, and they are today on a Beyond Budgeting journey, but some years ago they did a very interesting experiment around travel cost. In the pilot, they kicked out the travel budget, and most travel groups and regulations, and replaced it with full transparency. So with a few exceptions, everybody could see everything. If you travelled, to where did you fly, sleep, eat, cheaper, expensive, open for your colleagues to see and vice versa. And guess what happened with travel costs in that pilot? We'll Go Down Costs came down through a very simple self-regulating control mechanism. This was about tearing up pages in that rules book instead of doing the opposite. At the same time, we need to remember that transparency is a very powerful mechanism. It has to be applied with wisdom. So if it becomes naming and shaming, it doesn't work. And that is why I would always recommend companies to position transparency more from a learning perspective than from a control perspective. I mean, how can we learn from each other if everything is secret? And that control, that shock control effect, you would get in any case as a nice side effect. But again, it must be applied with wisdom. It is fascinating that the biggest fear managers have is to lose control, but what they haven't understood is that a lot of these controls are nothing but illusions of control.
Ula Ojiaku
That's very interesting. And another thing that I know that some, or if not most of the listeners will be wondering is, okay, you've talked about how, and in your… in both your books… actually the Implementing Beyond Budgeting and your latest one, This is Beyond Budgeting, you did mention something about “you can't get rid of Command and Control via Command and Control”. And in that part of the book, you were saying something that in terms of implementing it - it's something that you recommend the organisations do themselves. Can you elaborate on this? Cause someone, you know, might wonder, is it that you are against getting consulting help?
Bjarte Bogsnes
So, consultants and Beyond Budgeting. I think what you refer to is, I have a chapter about implementation advice, and one of these is that nobody can do this for you. And what I mean with that, and I explained this in the book, is that, I mean, I'm not saying that companies shouldn't ask for external help, and I'm offering external help, but what they typically should ask for is some inspiration, some guidance on implementation, connections to other companies that have implemented this, but it is not something that an organisation can delegate to consultants. This is not something consultants can do for you. You have to be in the driver's seat, and the more transformation- oriented your ambitions are, the more the executives need to take this role themselves. And I'm saying this because implementing Beyond Budgeting can be anything from a more cautious improvement of finance processes to a radical organisational transformation, and anything in between. And the higher your ambition levels, the higher the ownership in the organisation has to be. When it comes to the consultants, and I also write about this in my book, this is something that has happened just over the last few years, that is that the big consulting companies have gotten seriously interested in Beyond Budgeting. That was not the case before. And the reason for it is that their clients are getting interested, asking for it. And so most of these would like to work with us in some form or shape.
Ula Ojiaku
Sorry to interrupt, Bjarte. So by ‘us’, you mean the Beyond Budgeting Institute)?
Bjarte Bogsnes
Yeah. Yes. They want to work with the Beyond Budgeting advisory, the Beyond Budgeting Institute. And again, we are not naive. I mean, we come from different places, we might have different agendas here, but at the same time, these companies, they have channels and muscles that we don't have to the same extent, at least not yet. So we have actually decided to say yes to work with them, because we would rather help them and their clients succeed than to stand on the outside and watch them fail, right? So, we have been working, are working with a number of big companies, together with some of these big consulting companies.
Ula Ojiaku
That's great. And if I may just point to, because you spearheaded this in Statoil, now known as Equinor, and actually this was, I read this in your Implementing Beyond Budgeting book that your approach was based on two principles, no fixed implementation schedule, and no consultants. So how did that work, not having an implementation schedule.
Bjarte Bogsnes
Well, if we take the first implementation in Borealis back in the mid-nineties where we had a chance to do this, before there was anything called Beyond Budgeting, this company that was partly owned by Statoil, then, I mean, this wasn't an issue because there was no consultants. Even if we had wanted consultants, there was no one to reach out to. So then it was quite easy. In Statoil, later Equinor, it was more about the fact that I had that implementation experience from Borealis, which kind of, I became some kind of an in-house consultant. And again, as I said, I'm not saying that companies shouldn't use consultants, but you have to use the right ones and use them in the right way.
Ula Ojiaku
Okay. Thanks for clarifying. Okay, it seems like, you know, Beyond Budgeting would be something that we should seriously consider implementing in our organisation. What else should we be aware of?”
Bjarte Bogsnes
Well, I think it is important for everybody, also executives to understand that Beyond Budgeting changes work and how you work in a positive way, and for executives, I mean, the role becomes more strategic, more longer term. It's more about coaching, it's less about micromanagement, and maybe most important, there's a new credibility between what is said and what is done, right, which the organisation will notice. When it comes to other functions like finance, it also has a very positive effect. The job becomes much more business-oriented, less annual stunts, more forward-looking, less backwards-looking, more cooperation with other functions like for instance, human resources. And I can't think of a single finance person in Equinor that wants to go back to the old days and the time before 2005. And I think that provides an indication as well. And another key message is that what we have been talking about today, it will happen. It will happen. I don't care if it will be called Beyond Budgeting, or business agility or whatever, that is not important. But in 15, 20 years time, maybe earlier, when we look back at what was mainstream management in 2023, I think we will smile, maybe even have a laugh, just like we today smile about the days before the internet or before the smartphone. And how long ago is that? It's not that long ago. So organisations have a choice here, they can choose to be early movers or vanguards, understanding that you can get just as much competitive advantage out of management innovation as you can get from technology innovation. Or they can choose to be laggards, dragged into this as one of the last ones or anything in between. And every year you wait, competitors will be ahead of you. And I don't think that choice should be very difficult, and again, it should b. easier to make today, when so many organisations are embarking on a Beyond Budgeting journey. It was a bit tougher and a bit more scary 25 years ago when, when this started out, right. But again, it will happen.
Ula Ojiaku
I'm going to ask you a question I ask all my guests. What books have influenced you and would you recommend to the audience?
Bjarte Bogsnes
Well, many, many years ago, when I was an ardent budget supporter and believer, I read Maverick by Ricardo Semler, the former CEO of Semco, and I was mind-blown, simply mind-blown. It, kind of yeah, it really, really moved me, even if I kind of didn't have the chance to adopt any of that thinking before, many, many years later. Lately, again, I've mentioned Gary Hamel, and his co-author, Michele Zanini, they have written great books. The last book Humanocracy is a great one, and, a previous one by Gary Hamel, The Future of Management is also a book that I really like and I recall giving that book to the CEO of Statoil quite early on the journey, and he liked it so much that he gave it as a Christmas present to the rest of the executive committee.
Ula Ojiaku
Thank you, and of course I would add to the list This is Beyond Budgeting. If someone wants to get in touch with you, what's the best way of getting to you?
Bjarte Bogsnes
Yeah, then I will think about this as getting in touch with us, and when I say us, I mean that there is a core team of five, six people who are kind of driving this. And we have a website called, bbrt.org. That will give you more information about the Beyond Budgeting Roundtable, which is a global network of companies interested in this and individuals interested in this. And that is where you can sign up as company member, individual member. And I also recommend to subscribe to our newsletter, and if you're curious about this guy and all of this then I made that difficult decision a few years ago to leave Equinor, to start Bogsnes Advisory to be able to work full-time with this. And so I have my own small simple website called bogsnesadvisory.com And on bbrt.org you will also find a list of more books that I can highly recommend on this topic.
Ula Ojiaku
That's great. Are you on social media, Bjarte?
Bjarte Bogsnes
I am, I'm on LinkedIn, Twitter, and the only thing I write about is this stuff. There are no cats and dogs and grandchildren or anything, so that's why it's highly appreciated if somebody wants to follow me.
Ula Ojiaku
So any final words for the audience in terms of an ask? Is there something you want them to do?
Bjarte Bogsnes
Reflect a little bit about the risk picture here, because there is a very compelling risk picture, right? If you are afraid that it won't work in your organisation, well, what's really the downside risk? Because if you're right, if it doesn't, you can go back to the old way tomorrow. Not the single soul in the company would've forgotten how to budget as one example, and compare that minimal downside risk with that huge upside potential performance-wise. And I'm saying when this is working, not if it's working, as we have seen in so many organisations. So a very compelling risk picture. I think that is worth reflecting on as well.
Ula Ojiaku
Well, it's been great speaking with you, Bjarte. Thank you so much for those wise words and the advice, and I would again say to you, the audience, please go grab your copy of Bjarte's book, This Is Beyond Budgeting, which is now out. And I hope we'll definitely have another opportunity to have a conversation and speak about Beyond Budgeting, since you don't want to talk about any other thing. Anyway, so thank you again, Bjarte. It's a pleasure having you on.
Bjarte Bogsnes
Thank you, Ula. Thank you very much for the invitation.
Ula Ojiaku
That’s all we have for now. Thanks for listening. If you liked this show, do subscribe at www.agileinnovationleaders.com or your favourite podcast provider. Also share with friends and do leave a review on iTunes. This would help others find this show. I’d also love to hear from you, so please drop me an email at ula@agileinnovationleaders.com Take care and God bless!