This Is Beyond Budgeting

Chapter 4Separate and Improve

Here is advice on designing these new ways of working, after separating the budget purposes and preparing to solve each one in new and more tailored processes. You might find many of these quite different, some even radical. Still, this is not theory and wishful thinking. These are practices that all have been tested and applied in different Beyond Budgeting organizations over many years, with very good results. Chapter 9 provides tangible evidence.

Before we move on, let me clarify why the budget purpose separation we just discussed addressed only the three processes of target setting, forecasting, and resource allocation, whereas there are six management process principles. Performance evaluation and rewards are of a somewhat different nature and will now be based on targets instead of budgets. Coordination, the rhythm we run these on, applies to the other five principles.

Again, don't read any of this as instructions, as a cookbook with a Beyond Budgeting recipe. Take this as inspiration. Pick what works best for your organization, although within the implementation recommendations provided in Chapter 8.

Target Setting

I have yet to meet a football/soccer team stating that the ambition for the next season is to score 45 goals and reach 39 points. These are similar to budget targets, and these teams don't think like that. It is all about performing well against, and hopefully better than, the other teams.

This relative way of thinking can also ...