Many of the CFOs we talk to increasingly find themselves at the epicentre of internal frustration as they try to balance their responsibility for financial resilience with the need to enable business agility.
It's a tricky tightrope to walk.
The rigid processes of traditional financial management often lie behind these internal conflicts, but CFOs and CEOs fear that changing them will be difficult: it requires people to be bold; it requires them to think beyond the ways that things have always been done; and it invariably requires evidence before people are prepared to commit.
Beyond Budgeting is being embraced by a growing number of global companies, including Handelsbanken, Bayer Pharmaceuticals, Volvo, Equinor, and Roche Pharmaceuticals.
What's even more compelling, though, is the data supporting its effectiveness.
A December 2020 Boston Consulting Group (BCG) study sheds light on the benefits of Beyond Budgeting.
Among 174 finance executives surveyed, 59% reported increased sales beyond their former budget ceilings. Additionally, 56% saved significant costs in the budgeting process, and 41% freed up previously held back financial resources.
Beyond the financial gains, respondents reported significant improvements in organisational effectiveness. This included better business decisions (52%), more effective performance management (51%), and greater agility in reallocating resources (45%).
Further reinforcing the efficacy of Beyond Budgeting, a Bain survey conducted in February 2022 with 236 clients found that firms regarded as leading the way in financial planning are much more likely to be applying Beyond Budgeting principles to their leadership and management processes than those that don't.
This data shows how embracing change in financial management can lead to competitive advantages.
What makes Beyond Budgeting additionally compelling for finance professionals is that it makes their jobs more meaningful. While the overall effort remains consistent, the work becomes more future and business oriented. Instead of the usual autumn sprint, a more continuous and arguably more manageable process takes over.
In a world where uncertainty is the new normal, Beyond Budgeting offers a fresh perspective on financial management: it's not just a change in approach; it's a change in mindset.