The theory is that the success of agile transformation requires a change in both budgeting mindset and process. It makes recommendations on how to change leadership and management processes in a consistent way in order to make the organisation more adaptable and human. The principles of Beyond Budgeting were developed at the same time as the points in the Agile Manifesto, and there are many parallels. There are some points that relate to management principles and others that relate to management processes. However, the common principle is that change is needed on both sides.
It is useless to talk about values and transparency if management processes have a completely different message. They also need to change to better reflect what we say and think about managing people.
In other words, what we preach on the left is in practice translated into processes on the right. An illustrative example, which best shows the relationship between the two pillars, is that it is useless to emphasise a lot "team, common interests and goals, cooperation" if colleagues get individual bonuses.
For example, Bjarte Bogsnes, President of the Beyond Budgeting Institute, explains in his presentation on linking principles and practices that finance and HR need to work together to achieve business agility.
The traditional management approach is based on the idea that people and the future can and should be managed. Traditional management is: rigid, detailed, annual, rules-based, command and control, even secretive.
Bjarte compares the two concepts through a transport example. After all, safety and good performance are important in both corporate operations and transport.
In the case of the traffic light that controls traffic performance, the one who programmed it is elsewhere. Moreover, it operates on the basis of information that does not reflect the current traffic situation. Bjarte says this is a good model for rules-based management.
By contrast, at roundabouts, drivers are in control, based on real-time information. The roundabout itself only provides the framework for drivers to perform well. It enables performance, but does not control it. The roundabout is actually a self-regulating system, as there is more interaction with other drivers. It brings individual values and mindsets much more to the fore.
Which is more efficient? Roundabouts are proven. Which is more difficult to drive in? Roundabouts. The twelve principles will help you to make more roundabouts!
This article was written by Zsuzsa Danka