Budżetowanie i Kontroling

Organisations prepare financial budgets and monitor performance against them to control their operations and to determine how well objectives and targets are achieved This article deals with how budgets are established, monitored and what control practices are used to achieve results.

Budgeting can be one of the more challenging areas for companies making the shift to Teal. The Teal practice of sensing and responding to current conditions rather than seeking to control them through budgeting and other means is a marked departure from Orange or even Green practices. From a Teal perspective, the control that often ensues from setting a budget can hamper the organization’s ability to sense and respond authentically. Every historical stage has given birth to a distinct perspective on Budgeting and Controlling when already applicable, and to very different practices:

Red Organizations

Budgeting and Controlling in today's understanding would not be recognized in Red Organizations. Planning tends to be shorter term with limited ability for long term strategy. The focus is typically on responding to new threats or opportunities that can be pursued for exploitation or gain.

Amber Organizations

Amber organizations rely on stable and replicable processes. They also create clearly defined structures and hierarchies. Together these features allow projects and plans to be delivered on a much larger scale than those achievable by Red organzations. Planning and budgeting is used to determine the resources needed to achieve well understood and predictable goals. Planning is a top down process with budgets being handed down to those further down the organization.

Orange Organizations

In Orange Organizations top management are responsible for determining the strategy and direction of the organization. These plans are broken down into objectives and targets for those further down the hierarchy. Managers at each level create the plans and budgets necessary to reach the desired objectives, in what is typically a yearly budgeting process. Planning typically includes budgets for expenditures (cost center) or target revenues (profit center), as well as investment budgets. Cascading down targets to every unit and team allows for management by objectives: each team is given some freedom in deciding how these budget objectives will be met, as long as they are met.

Budgeting and controlling goes hand in hand with the Orange management practice of ‘predict and control’. Yearly budgets are broken down into half-yearly, quarterly or monthly numbers. These numbers are then followed up by the accounting and finance department at the end of each period, to compare results with the plan. When results fall short of the prediction, managers are often asked to explain the difference, and to come up with corrective actions.

Green Organizations

Green organizations are often ill at ease with a finance dominated perspective on performance management. Whilst ‘predict and control’ methods are still used, other non-financial measures (for example, employee engagement and customer satisfaction) are valued as equally important. Budgeting is similar to that found in Orange organizations, but the measures are likely to be broader and agreed via a ‘bottom up’ as well as a ‘top down’ approach.

Teal Organizations

Teal organizations’ approach to planning and budgeting departs quite radically from what is considered best practice in traditional management thinking. Instead of trying to predict and control, Teal organizations try as much as possible to sense and respond to their environment. They typically work with simplified budgets, where variances are tracked for information rather than control reasons. The purpose of defining a budget is driven by practical considerations such as coordination of resources, making sure that cash flow is sound and ensuring that financial obligations and liabilities are covered.

Simplified budgets, no tracking of variance

Many traditional organizations go through a painful budgeting cycle every year to establish a plan for controlling organizational performance.

In Teal organizations budgets are only established if a forecast is needed to inform an important decision, for example:

• Coordination or acquisition of resources: At FAVI, for instance, once a year, teams make rough monthly predictions for the year to come, to secure contracts for raw materials.
• Sound cash flow and fulfilment of financial obligations:

It makes sense at times to establish a realistic budget so that problems can be anticipated and obligations met. Individual teams in Buurtzorg don’t make any significant purchasing or investments, so don’t require a team budget. However, at a Group level, Buurtzorg makes a simple projection of its expected cash flow (it fits on one sheet of paper) to get a sense of how many new teams it can allow to start up in the coming year; new teams can take up to a year to break even, and Buurtzorg wants to make sure they can be supported and sustained.

In the absence of these reasons, many organizations find they need not make any budget at all. Sun Hydraulics makes no budget (unless the board demands one, in which case a rough one-page budget is put together).

Peer challenge but no management control

If a budget is established, there is no tweaking from above. Whatever numbers the teams forecast become the budget. Some companies find it is useful for peers to challenge each other’s budgets. In keeping with the spirit of Self Management no one can force a team to change their numbers. For example at Morning Star, units present their budget and investment plans to a budget task force, composed of volunteers from all parts of the business, that can challenge the numbers, and offer opinions and suggestions. AES used to have a similar process.

No 'Top Down' targets

Teal organizations don’t set any top-down targets. Sales people at FAVI for example have no targets to reach. From an Evolutionary-Teal perspective, targets are problematic for at least three reasons;

• they rest on the assumption that we can predict the future,
• they skew our behavior away from inner motivation, and
• they tend to narrow our capacity to sense new possibilities.

From a Teal perspective, life is complex and events and circumstances change so fast, that setting a target is mostly guesswork. A year after a target has been set, in most cases it is just an arbitrary number―either so easy to reach as to be meaningless or so challenging that people must take shortcuts. Both circumstances hurt the organization in the long run.

Targets and in particular budget and sales targets also skew our behavior. In many companies managers often spend any budget left at the end of the year, sometimes on meaningless items, for fear that their funding might be cut in the following year. Without targets, these games disappear. People are free to tap into their inner motivation to simply do the best job they can.

In self-managing organizations, people can choose to set themselves targets when they find it useful―rather like a hobby runner who spurs herself on by extending her goals. At FAVI, operators set themselves target times to machine their pieces, and they monitor their performance against that target.

Targets provide guidance when they are well understood. They become problematic when circumstances change and they do not change in response.

Letting go of the desire to control

Predictions are valuable in world that can be controllled, but lose relevance in a complex world that is changing rapidly. Setting budgets and managing against them is a way of trying to predict the future.

Teal organizations make peace with a complex world by understanding that a perfect solution is rarely possible. Determing a workable solution that can be implemented quickly is far more effective than waiting for detailed analysis before taking action. When new information emerges, the decision can be revisited and improved at any point. From this perspective, creating budgets for long periods ahead, and trying to exercise control makes little sense.

Companies that work this way, make many fast iterations instead of a few mighty leaps, progressing much faster towards their purpose. In the end, paradoxically, people often feel safer when they give up the illusion of control and learn to work with reality as it unfolds.