Documentos de Académico
Documentos de Profesional
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The case for transformation 2 © Niels Pflaeging & Gebhard Borck – All rights reserved
Phase 1 of the journey:
Looking for a world “beyond budgeting”
strategy
Fixed
performance
contracts
• Too centralized
• Too inward-looking
control • Too little customer-oriented
• Too bureaucratic
• Too much focused on control
• Too functionally divided
• Too slow and time-consuming
• Too de-motivating
• …
From the film ‘Modern Times’ with Charlie Chaplin, 1936
The case for transformation 5 © Niels Pflaeging & Gebhard Borck – All rights reserved
The world has changed –
outlining today's critical success factors
Changing
leadership and
structure
Relative
strategy performance
contracts
Changing
Fixed
performance processes
Dynamic
contracts
coordination
control
Centralized Decentralized
hierarchy, network,
“command and “Sense and
control“ respond“
Industry
Retail
Sciences: Practice:
Stafford Beer
Thought leaders Margareth Wheatley Industry leaders
(selected) Niklas Luhmann (selected)
W. Edwards Deming
Kevin Kelly
Ross Ashby
Joseph Bragdon
…
Douglas McGregor
Chris Argyris Complexity
Jeffrey Pfeffer theories
Reinhard Sprenger Industry
Stephen Covey
Howard Gardner
Viktor Frankl Social sciences
… and HR Retail
Peter Drucker
Tom Peters Leadership & Services
Charles Handy change
John Kotter
Peter Senge Strategy &
Thomas Davenport Governments
Peter Block Performance
& NGOs
… management
Henry Mintzberg
Gary Hamel
Jeremy Hope
Michael Hammer
Thomas Johnson
The case for transformation Charles Horngren 12 © Niels Pflaeging & Gebhard Borck – All rights reserved
…
Welcome to the 3rd phase of the BetaCodex journey!
Problems
Problems
Vision
Vision
Practice
Practice
Close
Close
the
the gaps!
gaps!
The case for transformation 14 © Niels Pflaeging & Gebhard Borck – All rights reserved
“Incremental change”, starting with tools
or within a specific function (e.g. finance), fails to transform!
High
Geared towards efficiency Geared towards complexity
New
Adaptive model
Traditional processes
Low model
The case for transformation 15 © Niels Pflaeging & Gebhard Borck – All rights reserved
There are two different ways of working on the model –
evolution and transformation
Sustaining and
deepening of the
Integration decentralized model,
Evolution phase through generations
within the decentralized
model (culture of Transformation
empowerment and trust) through radical
decentralization of
decision-making
Differentiation Stagnation
phase within the tayloristic model
Gap!
Gap!
The case for transformation 17 © Niels Pflaeging & Gebhard Borck – All rights reserved
Coherence is a critical issue
The case for transformation 18 © Niels Pflaeging & Gebhard Borck – All rights reserved
Is transformation possible?
f( D x V x S )> R
The results:
• More successful than its competitors in
all relevant performance indicators.
• One of the most respected companies in
Germany. Strong organic growth.
• Almost without hierarchy, since the late
1990s. “Branches rule“, leadership
happens “by dialogue“.
D = Dissatisfaction V = Vision
S = Strategy/Steps R = Resistance
The case for transformation 20 © Niels Pflaeging & Gebhard Borck – All rights reserved
There are two different ways of working on the model –
evolution and transformation
Sustaining and
deepening of the
Integration decentralized model,
Evolution phase through generations
within the decentralized
model (culture of Transformation
empowerment and trust) through radical
decentralization of
decision-making
Differentiation Stagnation
phase within the tayloristic model
The case for transformation 22 © Niels Pflaeging & Gebhard Borck – All rights reserved
It s a different
mental
The case for transformation 23 © Niels Pflaeging & Gebhard Borck – All rights reserved
The 12 principles of the Beyond Budgeting model are in fact
a full set of “design principles“ for the new organization type.
Performance and Performance culture, beat the market Inspired by the past, burocratic
6 “devolved
freedom Autonomy and responsibility Adherence to fixed plans
leadership” principles
Governance and Clearly defined objectives and values Impose objectives from above
transparency Open and shared information Restricted information
Goals and Goals related to continuous improvement Fiscal year, fixed goals
rewards Rewards related to organization results Reward local, fixed goals
Processes
The case for transformation 24 © Niels Pflaeging & Gebhard Borck – All rights reserved
Principles for transforming the model
2. Case for Change – A compelling change manifesto must be built at the top
before doing anything.
5. Process – The principles for leading change must be built into a process
and adopted without exception.
The case for transformation 25 © Niels Pflaeging & Gebhard Borck – All rights reserved
Principles: Leading major, transformational change
Organizati
ona
change pro l
cess 3. Beginning
2. Neutral Zone
1. 2. 3. 4.
Create a Pull 5. 6.
Develop Communi- 7.
sense of together a Empower Produce 8.
change cate for Don't
urgency guiding under- all others short-term Create
vision and let
coalition standing to act wins a new
strategy up!
and buy-in culture
References
1. Ending
ual
Individ rocess
n ge p
c ha
The case for transformation 26 © Niels Pflaeging & Gebhard Borck – All rights reserved
To transform your organization from “command & control” to
“decentralized network”, a double helix change is needed
Organizati
onal
change pr
ocess 3. Beginning
2. Neutral Zone
1. 2. 3. 4.
Create a Pull 5. 6.
Develop Communi- 7. 8.
sense of together a Empower Produce
change cate for Don't Create
urgency guiding under- all others short-term
vision and let a new
coalition standing to act wins
strategy up! culture
and buy-in
References
1. Ending
ual
Individ rocess
ep
chang
The case for transformation 27 © Niels Pflaeging & Gebhard Borck – All rights reserved
The case for transformation – a summary
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