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The Little Book of Beyond Budgeting summary
Brief summary
The Little Book of Beyond Budgeting: A New Operating System for Organisations by Steve Morlidge offers a practical guide to revolutionize traditional budgeting and embrace a more flexible, adaptive approach to financial management.
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Table of Contents
The Little Book of Beyond Budgeting
Summary of key ideas
Understanding the Traditional Budgeting System
In The Little Book of Beyond Budgeting: A New Operating System for Organisations by Steve Morlidge, we are introduced to the traditional budgeting system. Morlidge explains how this system, which was designed to control costs and manage performance, has become outdated and ineffective in today's fast-paced and unpredictable business environment.
He argues that the traditional budgeting process is time-consuming, often leading to inaccurate forecasts and arbitrary targets. This, in turn, creates a culture of gaming and sandbagging, where employees manipulate the system to meet their targets, rather than focusing on the company's overall success.
The Principles of Beyond Budgeting
Morlidge then introduces us to the Beyond Budgeting model, a management philosophy that aims to replace the traditional budgeting system. The model is based on twelve principles, which include values such as transparency, accountability, and customer focus. These principles are designed to create a more flexible and adaptive management system.
One of the key principles of Beyond Budgeting is the idea of setting relative, rather than fixed, targets. This means that instead of setting specific numerical targets, companies should focus on improving their performance relative to their competitors. This approach encourages continuous improvement and innovation, rather than simply meeting predetermined goals.
Implementing Beyond Budgeting
In the latter part of the book, Morlidge discusses the practical aspects of implementing the Beyond Budgeting model. He emphasizes the importance of creating a culture of trust and empowerment within the organization. This involves giving employees more autonomy and decision-making power, rather than relying on top-down control.
He also highlights the need for a more dynamic performance management system. Instead of relying on annual budgets, companies should adopt rolling forecasts and use key performance indicators (KPIs) to monitor their progress. This allows for quicker responses to changes in the business environment.
Challenges and Benefits of Beyond Budgeting
While Morlidge acknowledges that implementing Beyond Budgeting is not without its challenges, he also outlines the potential benefits. He argues that the model can lead to improved decision-making, increased employee motivation, and ultimately, better financial performance.
He also addresses common concerns about the model, such as the fear of losing control and the need for financial discipline. Morlidge suggests that these concerns can be addressed by creating a more transparent and accountable management system, based on the principles of Beyond Budgeting.
Conclusion
In conclusion, The Little Book of Beyond Budgeting by Steve Morlidge provides a comprehensive overview of the traditional budgeting system and the principles of Beyond Budgeting. It offers a compelling argument for why the traditional budgeting system is no longer effective and how the Beyond Budgeting model can provide a more adaptive and sustainable alternative.
The book serves as a valuable resource for business leaders and managers who are looking to improve their company's performance and create a more agile and innovative organizational culture.
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What is The Little Book of Beyond Budgeting about?
The Little Book of Beyond Budgeting: A New Operating System for Organisations by Steve Morlidge offers a fresh perspective on traditional budgeting practices. It introduces the concept of Beyond Budgeting, which advocates for a more flexible and adaptive approach to financial planning and control. Through real-life examples and practical insights, the book challenges the status quo and provides a roadmap for implementing a new operating system that aligns with today's dynamic business environment.
The Little Book of Beyond Budgeting Review
The Little Book of Beyond Budgeting (2010) explores an innovative approach to managing organizations that goes beyond traditional budgeting practices. Here's why this book is worth reading:
- With its practical insights and real-world examples, it provides a comprehensive guide for implementing a more flexible and adaptable management system.
- Backed by extensive research and case studies, it challenges the traditional budgeting model and offers alternative strategies for achieving organizational success.
- The book's thought-provoking ideas and emphasis on empowerment and accountability make it a refreshing and engaging read, keeping you hooked from start to finish.
Who should read The Little Book of Beyond Budgeting?
- Professionals, managers, and executives seeking to improve their organization's performance and agility
- Individuals looking for an alternative to traditional budgeting and financial management
- People interested in implementing innovative and flexible business practices
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The Little Book of Beyond Budgeting FAQs
What is the main message of The Little Book of Beyond Budgeting?
The main message of The Little Book of Beyond Budgeting is to challenge the traditional budgeting system and provide alternative approaches for organizational success.
How long does it take to read The Little Book of Beyond Budgeting?
The estimated reading time for The Little Book of Beyond Budgeting is a few hours. The Blinkist summary can be read in just 15 minutes.
Is The Little Book of Beyond Budgeting a good book? Is it worth reading?
The Little Book of Beyond Budgeting is worth reading for its insightful ideas and practical strategies that challenge conventional budgeting practices.
Who is the author of The Little Book of Beyond Budgeting?
The author of The Little Book of Beyond Budgeting is Steve Morlidge.
What to read after The Little Book of Beyond Budgeting?
If you're wondering what to read next after The Little Book of Beyond Budgeting, here are some recommendations we suggest:
- Basic Economics by Thomas Sowell
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- Secrets of the Millionaire Mind by T. Harv Eker
- The Richest Man in Babylon by George S. Clason
- Business Adventures by John Brooks
- The Most Important Thing by Howard Marks
- More Money Than God by Sebastian Mallaby
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