By Steve Denning – “What is required in today’s creative economy,” wrote Gary Hamel recently, “is a radical rethink of our top-down, tradition-encrusted management principles and processes. The challenge: building organizations that are as innovative as they are efficient, as passion-filled as they are pragmatic… This is not merely about implementing a new practice, process or structure. Instead, we have to start with a new set of management principles.”
The Agile movement began in software development, while the Beyond Budgeting (BB) movement started from a re-think of budgeting principles. What’s interesting is to see how far these two movements, which had such radically different origins, have steadily converged.
The purpose of the Beyond Budgeting movement is not necessarily to get rid of budgets. The purpose is to create these organizations that are more adaptive, more human, call it more agile. In order to do that, we need to change traditional management.
At the core of traditional management, you find the budgeting process and the budgeting mindset. So the budget is “the elephant in the room.” An organization can never be truly agile unless you also address that mindset, and that process. It is necessary but not sufficient. more>