thinking outside the budget box: financial governance innovation thoughts on moving beyond the...

7/28/2019 Thinking Outside the Budget Box: Financial Governance Innovation Thoughts on Moving Beyond the Traditional Budget

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ICGFM 27th Annual International Training Conference:

Good Public Financial ManagementPractices in a Period of Global Adjustments

Thinking Outside the Budget Box:Financial Governance Innovation Thoughts

on Moving Beyond the Traditional Budget.

May 24, 2013, Miami, Florida.

Jean-Baptiste SawadogoPresident

Leader One IncTel. +1 613 721 8087;

Email: [email protected]

1 2013 Leader One Inc.
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Opening Poll

Budget supremacy

Agile technology

Results supremacy



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Financial Governance InnovationFor Enduring Results, Any Time,Any Season, Crisis or Not!

Innovate! Drop the Budget (as we know it) Use Agile Technology for Agile Financial

Governance Leap Forward to Enduring Results the

Wellbeing and Happiness - of CitizensGirls, Boys, Women, Men

How Institutions and Governments CanNOW Get More Bang for the Buck, withIncreased Transparent and Secure Agilityif they CHOOSE!



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Sessions Abridged ExpectedOutputs, Outcome, and Impact

Improved awarenessand shift away from the insidethe budget box thinking in PFM (Output)

Improved awareness of the strategic and results focus

in PFM (Output) Improved awareness of a savvier use of agile technology

for PFM (Output)

Greater focus on enduring PFM Governance resultsachievement (Outcome)

Improved agility and soundness of PFM (Outcome) Increased resilience in times of crisis, even with deficits

of crisis proportions (Outcome)

Improved wellbeing and happiness of citizens girls,boys, women, and men (Impact).



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Central Hypothesis

Businesses and countries that are using aresults focus, supported by agile

technology are doing much better intimes of crisis

Even though the countries are not usingthe full strength of the strategic and

results focus (RBM) and the availableagile technologies, they are doing better

The financial crisis is the symptom of abroader ongoing exponential change



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A Perpetual Adjustment Era?

Are we in a period of adjustment from thefinancial crisis?

Are we in an era of perpetualadjustment?

The 21st Century is the era of perpetualchange and perpetual adjustment

We need to be honing our agility toadapt all the time

We need to be innovating,

continuously 6 2013 Leader One Inc.


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Financial Governance InnovationInnovation for Enduring Results

Innovation in vision setting

Innovation in financial planning

Innovation for HR agility

Innovation in financial execution

Innovation in decision-making

Innovation in financial recording, reconciliation,

analysis, audit, risk management, standards Innovation in financial transparency, corruption

prevention/detection/resolution mechanisms

Innovation in reporting and communication

Innovation for enduring results 7 2013 Leader One Inc.


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Imagination for Innovation

Imagination is better thanknowledge Albert Einstein

Logic will take you from A to Z;imagination will get you

everywhere Albert Einstein



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Reflection Point 1

What do you think of this topic sofar?

How do you see it? How does itsound to you? How does it feel?

Does it makes sense?

Is it out of this world thinking? Are we on a path towards something

worth pursuing?9 2013 Leader One Inc.


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Three Key PFM GovernanceInnovation Aras

We will be covering only three areas

Innovation Area 1: Shifting away

from the traditional budgetsupremacy

Innovation Area 2: Greatertechnological agility for agile

Financial Governance

Innovation Area 3: Greater emphasisand focus on citizen-centric results



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Innovation Area 1: Shifting away fromthe traditional budget supremacy

The language of Finance is veryrevealing with contrasts

Private Sector: finance is aresource to invest for a return

Public Sector: finance is anexpenditure, an expense, a use up

Private sector: there is a growingmovement to drop the budget

Public sector: the budget is the

LAW with a life of its own 11 2013 Leader One Inc.


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There is an Ongoing RethinkingAbout Finance; About the Budget

For the purpose of improvingperformance

Getting out of the financial crisis Moving from historic bean

counting and backward looking

To an integrated historicaccounting and forward-lookingstrategic anticipation



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The Role of Finance is Evolving

In the Private Sector especially and in thePublic Sector as well

In part because of the financial crisis The CFO/Treasurer is becoming, more

and more, a strategic partner

Strategic partnership with the highestlevel of the institutional leadership

Finance is providing more comprehensivesupport to the whole organization outside

its traditional mandate 13 2013 Leader One Inc.


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The New Duties of the CFOOr the Treasurer (Source 2)

Strategic advisor for an evergreen corporatestrategy and governance structure

Anticipate/detect trends in the core business

Sharpen strategic resource allocations

Integrate forecasting, reporting, and analytics

More closely integrate with, support and createefficiencies across business units

Promote a client-centric value culture

Manage financial risk proactively and historically

Improve the speed and quality of decisions



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Private Sector: the Budget is aResource Allocation Exercise

The main purpose of the allocation isthe profit: the return on investment

If it does not work, we can fix it, ordrop it, and find a better tool

The majority of companies still use

the budget However, there is a new movement:

a drop the budget movement



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Why Drop the Budget?

Life is dynamic! Change happens!

Plans are not perfect; they must be

changed or they can become costly There is a Beyond Budgeting

movement spearheaded by the

Beyond Budgeting Round Table Leaders: Jeremy Hope and Steve Player

Books, articles, seminars, webinars...

Very active in Europe & North America16 2013 Leader One Inc.


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What They Think of The Budget

It sucks the energy, time, fun, andbig dreams out of an organization. It

hides opportunities and stuntsgrowth. It brings out the mostunproductive behaviors in anorganization, from sandbagging to

settling for mediocrity- Jack Welsh, Author of Winning and

former CEO of General Electric



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BBRTs 10 Reasons for Replacing theBudget/1 (Source 1)

1. Prevents rapid response to unpredictableevents

2. Is too detailed and expensive, absorbing

around 20% of management time3. Out of date within a few months. Key

assumptions change frequently, causingconfusion and rework.

4. Out of kilter with the competitive environment5. Is divorced from strategy. Budgets are based

on functions and departments rather thanstrategic themes



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BBRTs 10 Reasons for Replacing theBudget/2 (Source 1)

6. Stifle initiative and innovation

7. Protects non-value-adding costs. Cost budgetsare usually compiled and agreed on based on

prior-year outcomes8. Reinforces command-and-control. Budgets

were designed to enable functional leaders tomanage the organization from the centre

9. Budgeting de-motivates people10. Encourages unethical behaviour and increases

reputational risk. Aggressive targets andincentives drive people to meet the numbers at

almost any cost 19 2013 Leader One Inc.


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What Beyond Budgeting CompaniesDo Instead of Budgeting/1 (Source 1)

1. Continuous Management: shift to rollingforecasts, thus eliminating the huge work-spikecaused by the annual budget exercise while

keeping finance focused on the future2. Target Setting: shift managements focus to

medium-term targets (three to five years out)that focus employees on reaching them quickly,

rather than negotiating a fixed annual budget3. Incentives: Convert the current pay-for-

negotiated results system into pay-for-performance system measured against peers



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What Beyond Budgeting CompaniesDo Instead of Budgeting/2 (Source 1)

4. Action Planning: Focus management onmaking the organization more agile to providefaster response to changing conditions

5. Resource Allocation: Free up the time wastedin annual budgeting negotiations and putting itinto continuous planning to quickly improve thebusiness

6. Accountability: Make teams more accountableby shifting control to relative key performanceindicators, focusing managers on continuouslyimproving costs



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Budget Believers Are SittingOn the Fence and Watching

The majority of companies still usethe budget for learning: stepping

back, examining changes in theirareas, resetting their assumptions

The budget sets them up for making

good decisions even if they laterdeviate from it

The budget helps align business

vision and financial operations 22 2013 Leader One Inc.


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What they Say of theBudget

If your budget is broken, fix it.

There is still value in a 12-monthforecast, as long as you

periodically revisit the

assumptions.- Miles Ewing, Deloitte Consulting



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Dropping the Budget SuccessStory (Source 3)

Statoil, a Norwegian energy company

Abolished budgeting in 2005 and left the

calendar year in 2010 21000 employees in 36 countries

Fortune 500 company

In 2011: was #1 in Social Responsibilityand #7 in Innovation

Last 10 years: above peer average onReturn on capital and value creation



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Public Sector RealityThe Budget is the Law!

The budget is an annual legislation forpublic expenditure

The Budget is supreme by tradition There is timid performance budgeting

movement but

Recent events reveal that the budget and

its process can be more of a burden thana blessing

In the 21st Century, the jury is out on the

effectiveness of the budget 25 2013 Leader One Inc.


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Reflection Point 2

What do you think of the droppingbudgeting idea? How does it sound

to you? How do you see it? How doyou feel about it?

In Your country, should you, and

could you drop the budget? What would you guess the most

innovative companies and countries

are doing? 26 2013 Leader One Inc.

i


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Innovation Area 2: GreaterTechnological Agility for AgileFinancial Governance

To achieve better results, successfulcompanies and countries leverageagile technology

Fortunately, technologicalcomputing power is growingexponentially while the cost is falling

exponentially as well Governments CAN NOW more EASILY

achieve Financial Governance Agility,while reducing risk, if they CHOOSE!



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Agile Technology to the Rescue!

Recent technological advances offergreater capacity and security

Make it easier and easier for governmentto be more strategic and results oriented

Offer government more transformativeand innovative capacity

Offer greater potential for moreeffectiveness, efficiency, accountability

Opportunities to better serve citizens:

girls, boys, women and men 28 2013 Leader One Inc.


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Agile Technologies...A Mass Democratization of IT

Agile Inexpensive Technological Innovations Agile means of access, storage, processing of data

Cloud Computing: SaaS (software), IaaS (infrastructure)

Telecommunications: global interconnectedness Legacy installation boosters (software)

Agile Analytics Business Intelligence software A new generation of applications gives access to data

with multiple media (widget-based dashboards; Apps;visual analytics or data display on PC, Tablets, Mobiles)

Big Data: awareness, meaning, insight, connections, silogap bridging, to answer questions we have or solveproblems (large warehouses; joined small databases)

Enriches performance measurement & decisions-making29 2013 Leader One Inc.


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Big Data Analytics

Big Data has become a buzz word

Big IT vendors invest to push their products onthe market (IBM, Oracle, SAP, Microsoft, HP)

IBM has spent over $10 billions buying emergingdata analytics companies

The US Government is spending $200 millionson Big Data projects to jump ahead to the next

IT frontier Data Analytics enables us to see undetectable

patterns in data, to understand risk exposure,better predict decision outcomes, etc



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Best in Class Companies Focus onResults and Use Agile Technologies

They are dropping the budget

They are using transformative

technologies (awareness -> innovation) They are automating and integrating

multiple functions and tasks

They are getting more effectiveness,more efficiency, less risk, more results

They are ahead and beyond theircompetition



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Top Performing CompaniesAutomate and Integrate

Multi-functional integration

Transactions recording

Financial analysis

Reporting Forecasting

Strategic planning

Scenario Planning

Driver-Based Planning

Performance management

Risk management

Audit

Work flow, CRM, HR, Decision-making, etc



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Could ComputingInexpensive Innovations

Software as a service (SaaS) and/orInfrastructure as a service (IaaS)

Developed and maintained by the vendor Vendor is paid by ongoing subscription

Operating costs are transparent,predictable, affordable

Capacity when you need it

Eliminates need for internal IT investment

Enables the focus on business execution33 2013 Leader One Inc.


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Cloud ComputingThe Big Players

Amazon Web Services - AWS

Software and infrastructure as a service

Industry leader, started before Cloud Analogy of electricity: accessible,

reliable, no set up fee; pay as you use

Hosts Amazon S3 (inexpensive storage) Multiple players

New small and growing companies

Big traditional companies (SAP, IBM)34 2013 Leader One Inc.


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What Does BI/Analytics Do?

It empowers us to learn more from databy revealing trends, patterns, variations

Achieves a single version of the truth Improved accuracy (by up to 100%)

Makes sense of "big data" a highvolume, high-velocity and high-variety of

information assets and formats

Resolves challenges for CFOs and Financedepartments (complexity; high costs; need for

real-time insight) 35 2013 Leader One Inc.


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What they Say AnalyticsBoost Performance

Managers in top performing

organizations are 30% morelikely than others to find theinformation they need, when

they need it- David White, Senior Research Analyst,Aberdeen Group



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Sample Types of Analytics

Marketing analytics

Decision-making analytics

Predictive analytics Social Media analytics

Business analytics

HR and Work force analytics

Privacy Analytics



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What they Say About Agility

Its been a difficult and volatileyear in the world economy,

however its the companies thathave built agile and flexibletreasuries that will see their waythrough the tough times.

- Katharine Morton, ManagingEditor, Treasury Perspectives



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Integrated InformationSystems Drive Performance

From departmental systems in silos

CRM: client relationship management

PSA: professional services automation

ERP: Financial/enterprise resource planning

To integrated information systems

SRS: service resource and mgt system

Finance, Accounting, Audit, M&E Visibility, transparency, productivity

SaaS/Iaas: evergreen provide affordable qualityapplications



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Sample Agile Companies

Amazon store (the largest store)

General Electric

Statoil Toyota Financial Services

The NASDAQ

Privacy Analytics



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Analysts of Agile Technology

Gartner Research (Magic Quadrant: Vendorand Product Scale; Graphic of 4 quadrants:caution, incumbent, innovator, leader)

Forrester Consulting

Service Performance Insight Research

American Productivity and Quality Centre

(APQC) G2 Crowd (Gartners quadrant revisited;

user review model; CRM and MarketingAutomation for now; Starts June 1, 2013)



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Sample Suppliers of Agility:Niches and Integrated

Infrastructure Solutions Amazon AWS for IT infrastructure

NASDAQ through AWS

Terracotta (boost legacy systems); Etc

Financial Management Solutions The traditional IBM, SAP, Oracle, SAS

Microsoft Dynamics (ERP for Public Sectoravailable);JDA; Sage; NetSuite; Birst,AxiomEPR; Board International; FreeBalence

Privacy Solutions

Privacy Analytics 42 2013 Leader One Inc.


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Financial Governance AgilitySolutions That Standout

Amazon AWS Cloud Computing software, Infrastructure, storage, IT

management services

Trintech Cadency: end-to-end financial governance software

Office of Finance manages the entire Record-to-Reportcycle in a single, unified product

Board International Board: combines Business Intelligence (Financial

Planning, forecasting, budgeting, scenarios planning,work flow) and Corporate Performance Management

Very flexible, fully integrates Microsoft Excel, etc.



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Big (Healthcare)

Data With Privacy Analytics Analytics with extra-confidentiality! De-identification Software : Used primarily on Big

(Healthcare) Data to release granular data sets whilepreserving privacy

Privacy Analytics was founded in 2007

Spun out of Electronic Health Information Lab (ChildrensHospital of Easter Ontario, Ottawa, Ontario, Canada)

Founder Khaled El Emam world renowned expert in de-

identification and privacy Only commercially available statistical de-identification

software available worldwide that also measures risk

Operationalizes US HIPAA Statistical Method, compliantwith Canadian and UK Regulations


P i A l i


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Privacy AnalyticsSample Customers

State of Louisiana

Department of Preventative Medicine

https://www.cancercare.on.ca/


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Governments to Watch for inFinancial Governance Agility/1

United States of America:

Investing $200 million in Big Data

Sample U.S. Departments speaking ata Big Data in Government (May 2013)Conference (Washington D.C.)

DOD (Defence), DOH (HomelandSecurity), NIST (Nat. Inst. Standardsand Technology), DOT (Transportation,DOE (Energy), etc



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Governments to Watch for inFinancial Governance Agility/2

Georgia: Integrated public financialmanagement system + e-budget (2012)

India: Central Bank modernises financialsystem with analytics

Philippines: Government IntegratedFinancial Management Information

Systems (GIFMIS) with an e-BudgetingSystem (by 2014)

Singapore: Social analytics for businessenterprises

2013 Leader One Inc. 47


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Reflection Point 3

What do you think of agiletechnology, BI, Big Data? How do

you see it? How does it feel to you?How does it sound to you?

Is it a buzz in your country?

Is investing in agile technology awaste of limited resources that couldbe put to better use?



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Innovation Area 3: Greater Emphasisand Focus on Citizen-Centric Results

There is a new Law

Results First or Budget First

What would you choose? Can history and the recent crisis

reveal an answer?

Well look at a sample companies and

countries that focus or not onResults, and see what happens



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Its 2013! We are in the 21stCentury! There is a New LAW!

The Law of the 21st Century: innovate to adapt or perish!

Exponential change, complexity; technological disruption;crisis; uncertainty; volatility; unforeseen events

Citizens are evolving as well: more and more aware,empowered with agile IT, growing expectations, demands

Necessity of strategic FOCUS: less emphasis on thebudget; more emphasis on where we want to go: vision,priorities, goals, results for girls, boys, women and men

Adopt or stick with RBM/MfDR (MBO and MBA are pass);apply more rigorously

Use technology to integrate as many functions as possible

Information in real time for better on time decisions

That is the NEW LAW! Innovate or perish; live or die!



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Results First vs. Budget First

What should it be?

Strategic common sense, a universal

principle, and evidence suggest Government primary emphasis should beResults First rather than Budget First

The Budget must support the

achievement of Results Rather than results informing budgetary

decisions as is the practice



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Results Supremacy Thinking

Financial resources have droppedconsiderably

Governments have accumulated deficitsof crisis proportions

We need a shift in mindset

Results supremacy governance offer the

best way out of the crisis Fortunes are made In times of crisis

when best companies invest, others

divest 52 2013 Leader One Inc.


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The Crisis Gives Governmentsa Second Chance to Refocus

Take a hard look at the results focus

As they struggle in crisis, it is difficult for

government to be conscious of thisissue

They are busy, acting on the shorttermextinguishing the fire

So, debates like this one today, can helpraise awareness and inspire long termaction Investing wisely/strategically forthe wellbeing and happiness of citizens



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History & the Crisis Reveal

Weaknesses of Budget supremacygovernance

Virtues of Strategic and Results-Based governance

Reminder the Results-Based

Management movement startedduring an economic crisis in thelate 1980s/early 1990s



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History & the Crisis Reveal /2

Based on common sense, not scientific

Companies that focus on results succeedand endure for centuries if they do notbecome complacent

Countries that focus on results becomemore successful, until they un-focus

their attention on their vision for results Countries that focus on budget

supremacy and lose sight of their visionfor results face difficulties or fail



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Companies & Countries thatFocused on Results Succeed

Sample companies

American Express, General Electric,

Boeing, Walt Disney, etc Sample countries

Australia, Canada, Chile, China, Japan,Korea, Poland, Rwanda, Singapore,Sweden, United States of America

In general, emerging countries thathave been forced to implement

RBM/MfDR 56 2013 Leader One Inc.

C t i th t F d


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Countries that Focused onBudget Supremacy

Developed countries in general;especially Western European

countries where tradition is verystrong

Exception: the Scandinavian

countries in general


h h


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Companies that Lost TheirResults Vigilance; Their Edge

In general, successful people,companies, countries, tend to

become less vigilant Sample companies: IBM and Kodak

Sample countries: Japan, United

States of America


In Summary: Countries on


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In Summary: Countries onResults Are Better Off

Countries that pursued resultswith the support of the budget

Seem to be doing better Until they forgot their focus on results

and fell into crisis situation

Countries that have innocentlystuck their heads in the sand ofbudget supremacy

seem to be having more difficulties59 2013 Leader One Inc.

C W Shif T R l


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Can We Shift To a ResultsFirst Mode in Government?

What are our biggest challenges?

Why we CAN but we WONTT? There is hope however


Th Bi Ch ll


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The Biggest Challenges toShifting to Results First

For most countries, legal and/orconstitutional reform are required

To subordinate the budget to results Or even raise the bar in favour of the

pursuit of results over budgets

It will take time and effort The biggest challenge is NOT that

we cant do it It is that WE WONT!



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Why We Wont Shift?

Entrenched governance structures

Politics and the powerful lobby

The fact that the Budget is the LAW andlikely to remain the law for theforeseeable future

The budget tradition and its ensuing

mindset , habits and culture Unawareness or belief among Finance

professionals, Economists, Researchers,

etc., that RBM/MfDR is irrelevant 62 2013 Leader One Inc.


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Why We Wont Shift/2

Despite (or because of) a decade ofinternational coordination and

harmonization efforts in RBM/MfDR There is still a proliferation of

definitions and sometimes conflicting

definitions, tools and practices inRBM/MfDR, Performance Budgetingand Performance Audit



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Why We Wont Shift/3

Selective application of RBM principles or lack ofrigor in application (including the WB, the UN)

Misunderstanding, confusions, misconceptions

regarding RBM/MfDR concepts and tools A hoard of new experts, sometimes with

minimal training, conquering the MfDR market

No wonder the verdict is of lack of progress in

MfDR at the High-Level Forum on AidEffectiveness in Busan, South Korea, 2011

We are afraid of FAILURE!



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What do We Do Instead?

We focus on structural reforms and elaborateprocesses, complex procedures and rules

We focus on activities, inputs and outputs

and leave outcomes and impacts toevaluators

We practice a lot of Indicators-BasedManagement (IBM) instead of RBM/MfDR

We lower the bar and undertake projects andprograms that we know we can measure and wecannot fail

Prohibit failure and you kill innovation!


Failure and Success Are


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Failure and Success AreTwo Sides of the Same Coin

Anyone who has never made a

mistake has never tried anythingnew. Albert Einstein



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There is Hope However

The Bilateral agencies, DAC-OECD, the UN, theWorld Bank and Regional Development Banksare still trying harder with RBM/MfDR

Developing countries are now buyers of RBM Developed countries have implemented reforms

to accommodate a results focus

Unfortunately, they tend not to go far enough,

for now they admit that they are struggling The Open Government movement will help

Big vision initiatives: MDGs; Ending ExtremePoverty by 2030 and More Prosperity for the

lower 40% are very useful67 2013 Leader One Inc.


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Reflection Point 4

What do you think of the ResultsFocus anyway? How does it feel to

you? How do you see it? How does itSound to you?

How would you characterize the

state of the Results Focus orRBM/MfDR in your country?


As We Conclude


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As We Conclude.More About Focus

Where do we go from here

Strategic focus

Citizen-centric focus Global and Finance partnership

Abundance focus

Innovation in Leadership andProcess

Innovation in action!69 2013 Leader One Inc.


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Where Do We Go From here?

We must innovate: take leadership role tobring Public Finance to the next level

Play our role of strategic partner at thehighest level while supporting all levels

Renew or begin putting more emphasison results and support it with the budget

Invest in agile technology to engage inAgile Financial Governance where all isintegrated for effectiveness, efficiency,risk reduction, ., results for citizens



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We Must Innovate!

We must accept and exercise ournew Finance strategic leadership

Build and nurture a culture ofinnovation for continuous adaptationfor the 21st Century and beyond

Mitigate innovation obstacles withinnovation and new idea adoptionmodels (resistance & commitment)


Innovation Is About Change


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Innovation Is About ChangeChange In Perspective

When You Change The Way You

Look At Things, The Things YouLook At Change. Unknown


A Culture of Innovation for


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A Culture of Innovation forResults Takes Care & Time

Seek commitment and support fromthe top to develop and nurture a

culture of innovation for results Develop and implement an

innovation strategy

Ensure stakeholder participation Limit failures: using the resistance,

commitment & adoption models



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Resistance-Commitment Scalehttp://www.changestudy.com/p/theory-base.html


Th Diff i f I ti
http://3.bp.blogspot.com/-388E1smlBG0/UR5qOO8RWyI/AAAAAAAAAWs/6rySeG2Wnxc/s1600/thedimensions.jpg


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The Diffusion of Innovations(Everett Rogers/Geoffrey Moore)


W M t B F d B


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We Must Be Focused: BeStrategic and Results Oriented!

Supremacy of Results: renewedemphasis on RBM/MfDR at all levels

Emphasis on Performance Budgetingthat support results by design

Emphasis on Performance Audit

Emphasis on the use of agiletechnology

Emphasis on abundance thinking


Citizen Centric Girls Boys


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Citizen-Centric - Girls, Boys,Women, Men - Results Focus

Keep in mind the analogy of the chain

A chain is as strong as its weakest link!

A community, a country, a society, an

organization is as strong as its weakestmember

Consider Jim Yong Kim/WBs pledge for a3% poverty by 2030 with more prosperityfor the lower 40% in every country

Consider an abundance thinkingapproach Abundance for all


What they Say About Focus


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What they Say About Focusand Innovation for Results

I have no doubt that the worldcan end extreme poverty within

a generation. But its not a givenand we cannot do it alone. Itrequires focus, innovation andcommitments from everyone.- Jim Young Kim, President, TheWorld Bank


Abundance: The Future is


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Abundance: The Future isBetter than You Think

Title of a book by Peter H. Diamandis andSteven Kotler

Diamandis is an innovation pioneer

He invites us to embrace change

He offers a roadmap (governments,industry, entrepreneurs) by offering hints

for strategic priorities and partnerships He gives us plenty of reasons to be

optimistic at creating a better future



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The Power of Focus

What we focus upon expands! Universal Law proven by Science

As a man thinketh, so is he Buddha

(Valid for a woman too!)


Innovation In Leadership


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Innovation In Leadershipand Process for Results!

Financeis part of the Process side of thebusiness of Government

Let us remember that to be effective, process

must play a supporting role; a difficultbalancing act in resource allocation,procurement, transparency, bad risk avoidance

Finance has a lot of clout and power in every

organization! What it does can have a positive ornegative impact on government results

Let us exercise this power wisely with aresults focused great leadership


Wisdom Nuggets for Great


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Wisdom Nuggets for GreatLeadership and Process

The Beyond the BudgetingPrinciples; a table by the Beyond

Budgeting Round Table (BBRT)Borrowed from an article on the

website MIX (details in Sources 3)

Wisdom nugget from Dee Hock,innovator, Founder & Former CEO ofVisa



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The Beyond Budgeting


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The Beyond BudgetingPrinciples1

Change in Leadership

1. Values: Govern through a few clearvalues, goals and boundaries, notdetailed rules and budgets

2. Performance: Create a highperformance climate, based on relative

success, not on meeting fixed targets3. Transparency: Promote open

information for self management, dontrestrict it hierarchically




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Change in Leadership (cont.)

4. Organization: Organize as a network oflean, accountable teams, not aroundcentralized functions

5. Autonomy: Give teams the freedomand capability to act, dont micro-

manage them6. Customers: Focus everyone on

improving customer outcome, not onhierarchical relationships




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Change in Processes

7. Goals: Set goals for continuousimprovement, dont negotiate fixedperformance contracts

8. Rewards: Reward shared success basedon relative performance, not on

meeting fixed targets9. Planning: Make planning a continuous

and inclusive process, not a top-downannual event




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Change in Processes (cont.)

10.Coordination: Coordinate interactionsdynamically, not through annualplanning cycles

11.Resources: Make resources available asneeded, not through annual budget

allocations12.Controls: Base controls on relative

indicators and trends, not on variances

against plan87 2013 Leader One Inc.

What they Say of the Beyond


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What they Say of the Beyondthe Budgeting Principles

Simple, clear purpose and principlesgive rise to complex, intelligentbehavior. Complex rules andregulations give rise to simple, stupidbehavior.- Dee Hock, Founder & former

CEO, Visa


Guidance for Action


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Guidance for Action7 Key Elements

1. Great Innovative Leadership (develop yourselfas a leader and develop leaders around you)

2. Great results-focused vision, goals, strategic

results (with Performance Management Frameworks)3. Right people and agile organizational structure

4. Right resources (budget) to support results

5. Right integrated agile PFM Governance systems

and processes supported by agile technologies6. Quality agile execution and M&E for results

7. Develop and nurture a dynamic citizen-centered innovation for results culture



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For Additional Information:

Email: [email protected]

Leader One Inc: http://www.LeaderOne.ca(Sign up)

Beyond Budgeting Round Table: http://www.bbrt.org

ICGFM Winter Conference Presentation (RBM/MfDR):http://icgfm.blogspot.ca/2009/12/management-for-results-in-public.html

DAC-OECD/World Bank: Managing for DevelopmentResults (MfDR): http://www.mfdr.org

Canadian International Development Agency: RBM info:http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-

92213444-N2H#intro Office of the Auditor General of Canada: Performance

Audit Manual: http://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtm

mailto:[email protected]://leaderone.ca/http://www.bbrt.org/http://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://www.mfdr.org/http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtmhttp://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtmhttp://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtmhttp://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtmhttp://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtmhttp://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtmhttp://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtmhttp://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/index.shtmhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT-92213444-N2Hhttp://www.mfdr.org/http://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://icgfm.blogspot.ca/2009/12/management-for-results-in-public.htmlhttp://www.bbrt.org/http://leaderone.ca/mailto:[email protected]:[email protected]:[email protected]


92/95

Reflection Point 5

What is your key take-away fromthis session?

What are you most driven to applyin your work?

What is your commitment today?

What is the first action that you willtake on your first day at worktowards your commitment?



93/95

Closing Poll

Budget supremacy

Agile technology

Results supremacy



94/95

Parting Words

We are what we think. All that we arearises with our thoughts. With our thoughts,we make our world. Buddha

Being human is having access to pure potentiality the source of everything that has ever beenand ever will be...

Let us release our limiting beliefs, imagine andhold the vision, of a world ofabundance for allgirls, boys, women and men, to become reality,through innovative Public Finance Governanceaction!


Our Future Is Better


95/95

Ou u u e s e eThan We Think!

It is up to each and everyone of us

Thank you!

Great innovative

leadership!Safe journey!

thinking outside the budget box: financial governance innovation thoughts on moving beyond the...

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