– insights from Bjarte Bogsnes at Implema’s CFO Summit
Traditional budgeting has long been a central tool in corporate management, but in an increasingly dynamic and unpredictable world, its limitations have become apparent. For companies to be “VUCA-robust” – able to handle Volatility, Uncertainty, Complexity, and Ambiguity – they need a management model that is flexible and adaptable.
Beyond Budgeting is an alternative management approach that challenges the traditional budget model and offers a more agile method for driving businesses forward.
At Implema’s CFO Summit, we had the privilege of listening to Bjarte Bogsnes, one of the leading experts in Beyond Budgeting and former CFO of Equinor (previously Statoil). He shared his insights on why traditional budgeting often hinders company development and how Beyond Budgeting can create a more agile, innovative, and efficient management model.
What is Beyond Budgeting?
Beyond Budgeting is a principle-based management model that aims to replace fixed, detailed budgets with more agile and decentralized control. Instead of locking companies into annual budget processes, the model builds on dynamic goals, continuous forecasting, and self-managing teams.
Beyond Budgeting is also about leadership and corporate culture – and the importance of leadership and management being in sync. The model is strongly rooted in Douglas McGregor’s Theory X and Theory Y, where Theory X assumes people need to be controlled through supervision and rewards, while Theory Y is built on trust and self-management. Beyond Budgeting is based on Theory Y, where companies give employees greater freedom to make decisions and take responsibility, requiring a culture that promotes autonomy, transparency, and decentralization. The image below is borrowed from Bjarte.
The model is built on twelve principles, divided into two categories:
- Leadership principles, which create a more adaptive and engaging organization where decision-making happens close to operations.
- Management principles, which focus on replacing fixed budgets with more flexible financial processes, such as rolling forecasts and relative targets.
Why Does It Work?
During his presentation at Implema CFO Summit, Bogsnes emphasized that Beyond Budgeting is about more than just budgeting – it’s a transformation of the entire management model. Companies implementing Beyond Budgeting can respond faster to changes, which is crucial in today’s fast-moving business landscape.
Key Insights from Bjarte Bogsnes:
Increased flexibility – Companies can adjust goals and resources continuously instead of being stuck with a static budget.
Better decision-making – Decentralized management ensures decisions are made closer to the customer and with better insights.
Reduced administration – Time and resources previously spent on budgeting can instead focus on value-creating activities.
Higher motivation and engagement – Employees get greater responsibility and freedom to act based on real-time information.
Companies Successful with Beyond Budgeting
Bogsnes highlighted several examples of companies that have successfully implemented Beyond Budgeting and seen clear results, including:
- Equinor (previously Statoil) was one of the first large organizations to implement Beyond Budgeting. By replacing traditional budgets with rolling forecasts and a more decentralized decision process, they have increased their adaptability and financial control.
- Handelsbanken has long been a pioneer in Beyond Budgeting. The bank has eliminated central budgets and instead allowed local branches to have greater responsibility and freedom to adapt to market needs. The result has been a more customer-focused and efficient organization.
Beyond Budgeting is thus not just about eliminating budgets, but about creating a culture of continuous adaptation and self-management. With the inspiring insights from Bogsnes’ lecture, it became clear that Beyond Budgeting isn’t just theory – it’s a practical method for enabling faster decision-making, better resource management, and higher engagement.
About Bjarte Bogsnes
Bjarte Bogsnes is an internationally recognized expert in Beyond Budgeting and has been a pioneer in the field for over two decades. He has a long career in finance and leadership, including as CFO at Equinor (previously Statoil), where he led the implementation of Beyond Budgeting. Bogsnes is also the author of the books Implementing Beyond Budgeting and This is Beyond Budgeting, as well as a frequently sought-after speaker at global conferences. Through his work, he has helped organizations worldwide create more flexible and dynamic management models adapted for a rapidly changing business environment. Bjarte Bogsnes has received several awards for his work in management innovation. Among others, he has been awarded a prestigious prize from Harvard Business Review and McKinsey for his contributions to the field.
