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The Amalgamation of Agile and Beyond Budgeting

With the reinvention of management practices across the globe, the agile and ‘beyond budgeting’ movements are making a difference in the process of software development. As the name suggests, the ‘beyond budgeting’ movement is not necessarily meant to get rid of budgets. Its purpose is to create an organization that is adaptive to agile.

In this article at Forbes, Steve Denning shares excerpts from his conversation with Bjarte Bogsnes, Chairman of Statoil, the Beyond Budgeting Institute and Senior Advisor Performance Framework. The latter shares his experience of implementing ‘beyond budget’ in the organization and its positive outcomes.

Connection: Agile & Beyond

Bogsnes explains that an organization cannot become truly agile unless the traditional budgeting mindset is changed. He says the beyond budget principles do not specifically address talent, but they address people and leadership. If an organization does it with the right approach, it will have positive implications for recruiting and retaining talent. Hence the connection between agile and beyond budget is extant but indirect.

Shifting Output to Outcome

As the focus of agile is shifting from outputs to outcomes, he says that beyond budget is very much about turning results into performance. Even though the measured results are not as similar to the performance, mostly measurements come through KPIs that are just indicators and not the ground reality. Bogsnes further recommends a holistic performance evaluation with a ‘pressure-test’ that helps in measuring the performance before drawing any conclusion. That’s another way of looking at the shift from outputs to outcomes.

Click on the following link to read the original article:

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