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Implementing Beyond Budgeting, 2nd Edition by Robert S. Kaplan, Bjarte Bogsnes

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CHAPTER 2Beyond Budgeting

“Simple, clear purpose and principles give rise to complex, intelligent behavior.
Complex rules and regulations give rise to simple, stupid behavior.”

Dee Hock

The Philosophy

Everybody loves innovation. Don't we all dream of inventing something unique that would take us to the forefront of our industry and give us a leading edge? Innovators are heroes, and Silicon Valley is a wet dream for creative people from all over the world. Venture capitalists and customers are also eagerly waiting for the next big thing.

Our love of innovation is, however, not without boundaries. It seems restricted to product and technology innovation. The moment we move to management innovation, love is replaced with fear. Management innovation is scary. Now, the question is no longer how we can be unique. Now, we look for best practice, meaning “common” practice; what is everybody else doing? To be on the safe side, we might call in the management consultants, who are more than willing to sell what they just sold to our competitors. I don't necessarily blame them. Why should they push something no one else or very few are doing when the opposite is so much easier?

The management innovation arena is therefore not yet a crowded place, while the product and technology arena is in comparison very crowded. Everybody is here, as it is safer and much less scary. The likelihood of getting competitive advantage is therefore much higher in the management innovation area, something ...

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