ICGFM 27th Annual International Training Conference: Good Public Financial Management Practices in a Period of Global Adjustments

Thinking Outside the Budget Box: Financial Governance Innovation Thoughts on Moving Beyond the Traditional Budget
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May 24, 2013, Miami, Florida

Jean-Baptiste Sawadogo

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Tel. +1 613 721 8087; Email: Jean-B.Sawadogo@LeaderOne.ca
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Leader One Inc

President

Opening Poll

Budget supremacy Agile technology

Results supremacy

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Financial Governance Innovation For Enduring Results, Any Time, Any Season, Crisis or Not!
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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 Citizens… Girls, Boys, Women, Men How Institutions and Governments Can NOW Get More Bang for the Buck, with Increased Transparent and Secure Agility if they CHOOSE!
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Session’s Abridged Expected Outputs, Outcome, and Impact
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Improved awareness and shift away from the “inside the 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 results achievement (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 a results focus, supported by agile technology are doing much better in times of crisis… Even though the countries are not using the full strength of the strategic and results focus (RBM) and the available agile technologies, they are doing better The financial crisis is the symptom of a broader ongoing exponential change…
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A Perpetual Adjustment Era?
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Are we in a period of adjustment from the financial crisis? Are we in an era of perpetual adjustment? The 21st Century is the era of perpetual change and perpetual adjustment… We need to be honing our agility to adapt all the time… We need to be innovating, continuously… © 2013 Leader One Inc. 6

Financial Governance Innovation… Innovation for Enduring Results…
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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…
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Imagination for Innovation…
“Imagination is better than knowledge” – 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 so far?  How do you see it? How does it sound 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?

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Three Key PFM Governance Innovation Aras
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We will be covering only three areas Innovation Area 1: Shifting away from the traditional “budget supremacy” Innovation Area 2: Greater technological agility for agile Financial Governance Innovation Area 3: Greater emphasis and focus on citizen-centric results
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Innovation Area 1: Shifting away from the traditional “budget supremacy”
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The language of “Finance” is very revealing with contrasts… Private Sector: “finance” is a resource to invest for a return Public Sector: “finance” is an expenditure, an expense, a “use up” Private sector: there is a growing movement to drop the budget Public sector: “the budget is the LAW” with a © life of its own 2013 Leader One Inc. 11

There is an Ongoing Rethinking
About Finance; About the Budget
For the purpose of improving performance  Getting out of the financial crisis  Moving from historic “bean counting” and backward looking  To an integrated “historic” accounting and “forward-looking” strategic anticipation

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The Role of Finance is Evolving
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In the Private Sector especially and in the Public 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 highest level of the institutional leadership Finance is providing more comprehensive support to the whole organization outside its traditional mandate © 2013 Leader One Inc. 13

The New Duties of the CFO Or the Treasurer (Source 2)
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Strategic advisor for an evergreen corporate strategy 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 create efficiencies 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 a Resource Allocation Exercise
The main purpose of the allocation is the profit: the return on investment  If it does not work, we can fix it, or drop 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 America © 2013 Leader One Inc. 16

What They Think of The Budget…
“It sucks the energy, time, fun, and
big dreams out of an organization. It hides opportunities and stunts growth. It brings out the most unproductive behaviors in an organization, from sandbagging to settling for mediocrity” - Jack Welsh, Author of Winning and former CEO of General Electric
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BBRT’s “10 Reasons for Replacing the Budget…/1 (Source 1)
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Prevents rapid response to unpredictable events Is too detailed and expensive, absorbing around 20% of management time Out of date within a few months. Key assumptions change frequently, causing confusion and rework. Out of kilter with the competitive environment Is divorced from strategy. Budgets are based on functions and departments rather than strategic themes”
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BBRT’s “10 Reasons for Replacing the Budget…/2 (Source 1)
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Stifle initiative and innovation Protects non-value-adding costs. Cost budgets are usually compiled and agreed on based on prior-year outcomes Reinforces command-and-control. Budgets were designed to enable functional leaders to manage the organization from the centre Budgeting de-motivates people Encourages unethical behaviour and increases reputational risk. Aggressive targets and incentives drive people to meet the numbers at almost any cost” © 2013 Leader One Inc. 19

“What Beyond Budgeting Companies Do Instead of Budgeting/1 (Source 1)
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Continuous Management: shift to rolling forecasts, thus eliminating the huge work-spike caused by the annual budget exercise while keeping finance focused on the future Target Setting: shift management’s focus to medium-term targets (three to five years out) that focus employees on reaching them quickly, rather than negotiating a fixed annual budget Incentives: Convert the current pay-fornegotiated results system into pay-forperformance system measured against peers”
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“What Beyond Budgeting Companies Do Instead of Budgeting/2 (Source 1)
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Action Planning: Focus management on making the organization more agile to provide faster response to changing conditions Resource Allocation: Free up the time wasted in annual budgeting negotiations and putting it into continuous planning to quickly improve the business Accountability: Make teams more accountable by shifting control to relative key performance indicators, focusing managers on continuously improving costs”
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Budget Believers Are Sitting On the Fence and Watching
The majority of companies still use the budget for learning: stepping back, examining changes in their areas, resetting their assumptions  The budget sets them up for making good decisions even if they later deviate from it  The budget helps align business vision and financial operations

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What they Say of the Budget…
“If your budget is broken, fix it. There is still value in a 12-month forecast, as long as you periodically revisit the assumptions.” - Miles Ewing, Deloitte Consulting
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“Dropping the Budget” Success Story (Source 3)
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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 Responsibility and #7 in Innovation Last 10 years: above peer average on Return on capital and value creation
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Public Sector Reality… The Budget is the Law!
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The budget is an annual legislation for public 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 than a blessing… In the 21st Century, the jury is out on the effectiveness of the budget © 2013 Leader One Inc. 25

Reflection Point 2…
What do you think of the “dropping budgeting” idea? How does it sound to you? How do you see it? How do you 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?

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Innovation Area 2: Greater Technological Agility for Agile Financial Governance

To achieve better results, successful companies and countries leverage agile technology… Fortunately, technological computing power is growing exponentially 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!
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Recent technological advances offer greater capacity and security Make it easier and easier for government to be more strategic and results oriented Offer government more transformative and innovative capacity Offer greater potential for more effectiveness, efficiency, accountability Opportunities to better serve citizens: girls, boys, women and men © 2013 Leader One Inc. 28

Agile Technologies... A Mass Democratization of IT

Agile Inexpensive Technological Innovations
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Agile means of access, storage, processing of data Cloud Computing: SaaS (software), IaaS (infrastructure) Telecommunications: global interconnectedness Legacy installation boosters (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, silo gap bridging, to answer questions we have or solve problems (large warehouses; joined small databases) Enriches performance measurement & decisions-making
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Agile Analytics – Business Intelligence software

Big Data… Analytics…
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Big Data has become a buzz word Big IT vendors invest to push their products on the market (IBM, Oracle, SAP, Microsoft, HP…) IBM has spent over $10 billions buying emerging data analytics companies The US Government is spending $200 millions on 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 on Results and Use Agile Technologies
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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 their competition
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Top Performing Companies Automate and Integrate
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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 Computing… Inexpensive Innovations
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Software as a service (SaaS) and/or Infrastructure 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 execution
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Cloud Computing… The 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…)

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What Does BI/Analytics Do?
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It empowers us to learn more from data by revealing trends, patterns, variations… Achieves a single version of the truth Improved accuracy (by up to 100%) Makes sense of "big data" – a high volume, high-velocity and high-variety of information assets and formats Resolves challenges for CFOs and Finance departments (complexity; high costs; need for
real-time insight)
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What they Say… Analytics Boost Performance
“Managers in top performing organizations are 30% more likely than others to find the information 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
“It’s been a difficult and volatile year in the world economy, however it’s the companies that have built agile and flexible treasuries that will see their way through the tough times.” - Katharine Morton, Managing Editor, Treasury Perspectives
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Integrated Information Systems 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 quality applications
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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: Vendor
and Product Scale; Graphic of 4 quadrants: caution, incumbent, innovator, leader)

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Forrester Consulting Service Performance Insight Research American Productivity and Quality Centre (APQC) G2 Crowd (Gartner’s quadrant revisited; user review model; CRM and Marketing Automation for now; Starts June 1, 2013)
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Sample Suppliers of Agility: Niches and Integrated…

Infrastructure Solutions
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Amazon AWS for IT infrastructure NASDAQ through AWS Terracotta (boost legacy systems); Etc…

Financial Management Solutions
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The traditional IBM, SAP, Oracle, SAS Microsoft Dynamics (ERP for Public Sector available);JDA; Sage; NetSuite; Birst, AxiomEPR; Board International; FreeBalence… Privacy Analytics

Privacy Solutions

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Financial Governance Agility Solutions That Standout…

Amazon AWS

Cloud Computing software, Infrastructure, storage, IT management services

Trintech
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Cadency: end-to-end financial governance software Office of Finance manages the entire Record-to-Report cycle in a single, unified product 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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Board International

“Big (Healthcare) Data” With Privacy Analytics
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Analytics with extra-confidentiality! De-identification Software : Used primarily on “Big (Healthcare) Data” to release granular data sets while preserving privacy Privacy Analytics was founded in 2007 Spun out of Electronic Health Information Lab (Children’s Hospital of Easter Ontario, Ottawa, Ontario, Canada) Founder Khaled El Emam world renowned expert in deidentification and privacy Only commercially available statistical de-identification software available worldwide that also measures risk Operationalizes US HIPAA Statistical Method, compliant with Canadian and UK Regulations
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Privacy Analytics Sample Customers
State of Louisiana

Department of Preventative Medicine

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Governments to Watch for in Financial Governance Agility/1

United States of America:
Investing $200 million in Big Data  Sample U.S. Departments speaking at a Big Data in Government (May 2013) Conference (Washington D.C.)  DOD (Defence), DOH (Homeland Security), NIST (Nat. Inst. Standards and Technology), DOT (Transportation, DOE (Energy), etc…

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Governments to Watch for in Financial Governance Agility/2
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Georgia: Integrated public financial management system + e-budget (2012) India: Central Bank modernises financial system with analytics Philippines: Government Integrated Financial Management Information Systems (GIFMIS) with an e-Budgeting System (by 2014) Singapore: Social analytics for business enterprises
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Reflection Point 3…
What do you think of agile technology, 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 a waste of limited resources that could be put to better use?

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Innovation Area 3: Greater Emphasis and Focus on Citizen-Centric Results
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There is a new “Law” … “Results First” or “Budget First”… What would you choose? Can history and the recent crisis reveal an answer? We’ll look at a sample companies and countries that focus or not on “Results”, and see what happens…
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It’s 2013! We are in the 21st Century! There is a New LAW!
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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 the budget; 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 passé); 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”
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What should it be? Strategic common sense, a universal principle, and evidence suggest… Government primary emphasis should be “Results 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
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Financial resources have dropped considerably Governments have accumulated deficits of 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… © 2013 Leader One Inc. 52

The Crisis Gives Governments a Second Chance to Refocus…
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Take a hard look at the results focus As they struggle in crisis, it is difficult for government to be conscious of this issue… They are busy, acting on the short term…“extinguishing the fire” So, debates like this one today, can help raise awareness and inspire long term action… Investing wisely/strategically for the wellbeing and happiness of citizens…
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History & the Crisis Reveal…
Weaknesses of “Budget supremacy” governance  Virtues of “Strategic and ResultsBased” governance  Reminder… the “Results-Based Management” movement started during an economic crisis in the late 1980s/early 1990s

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History & the Crisis Reveal… /2
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Based on common sense, not scientific… Companies that focus on results succeed and endure for centuries if they do not become complacent Countries that focus on results become more successful…, until they un-focus their attention on their vision for results… Countries that focus on “budget supremacy” and lose sight of their vision for results… face difficulties or fail…
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Companies & Countries that Focused 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 that have been “forced” to implement RBM/MfDR © 2013 Leader One Inc. 56

Countries that Focused on “Budget Supremacy”…
Developed countries in general; especially Western European countries where tradition is very strong  Exception: the Scandinavian countries in general

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Companies that Lost Their Results 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

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In Summary: Countries on “Results” Are Better Off

Countries that pursued “results” with 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 “innocently” stuck their heads in the sand of “budget supremacy”

seem to be having more difficulties
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Can We Shift To a “Results First” Mode in Government?
What are our biggest challenges?  Why we CAN but we WONT’T?  There is hope however…

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The Biggest Challenges to Shifting to “Results First”

For most countries, legal and/or constitutional 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 can’t do it… It is that WE WON”T!

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Why We Won’t Shift?
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Entrenched governance structures Politics and the powerful lobby The fact that the Budget is the LAW and likely to remain the law for the foreseeable 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 © 2013 Leader One Inc. 62

…Why We Won’t Shift/2
Despite (or because of) a decade of international coordination and harmonization efforts in RBM/MfDR…  There is still a proliferation of definitions and sometimes conflicting definitions, tools and practices in RBM/MfDR, Performance Budgeting and Performance Audit

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…Why We Won’t Shift/3
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Selective application of RBM principles or lack of rigor 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 Aid Effectiveness in Busan, South Korea, 2011 We are afraid of FAILURE!
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What do We Do Instead?
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We focus on structural reforms and elaborate processes, complex procedures and rules… We focus on “activities”, “inputs” and “outputs” and leave “outcomes” and “impacts” to evaluators We practice a lot of “Indicators-Based Management (IBM)” instead of RBM/MfDR We lower the bar and undertake projects and programs that we know we can measure and we cannot fail Prohibit failure and you kill innovation!
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Failure and Success Are Two Sides of the Same Coin
“Anyone who has never made a mistake has never tried anything new.” – Albert Einstein

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There is Hope However…


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The Bilateral agencies, DAC-OECD, the UN, the World Bank and Regional Development Banks are 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 Extreme Poverty by 2030 and More Prosperity for the lower 40%… © 2013 Leader One Inc. are very useful 67

Reflection Point 4…
What do you think of the “Results Focus” anyway? How does it feel to you? How do you see it? How does it Sound to you?  How would you characterize the state of the “Results Focus” or RBM/MfDR in your country?

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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 and Process  Innovation in action!

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Where Do We Go From here?
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We must innovate: take leadership role to bring Public Finance to the next level Play our role of strategic partner at the highest level while supporting all levels Renew or begin putting more emphasis on results and support it with the budget Invest in agile technology to engage in Agile Financial Governance where all is integrated for effectiveness, efficiency, risk reduction, …., results for citizens
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We Must Innovate!
We must accept and exercise our new Finance strategic leadership  Build and nurture a culture of innovation for continuous adaptation for the 21st Century and beyond  Mitigate innovation obstacles with innovation and new idea adoption models (resistance & commitment)

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Innovation Is About Change Change In Perspective…
When You Change The Way You Look At Things, The Things You Look At Change. – Unknown

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A Culture of Innovation for Results Takes Care & Time
Seek commitment and support from the 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 Scale
http://www.changestudy.com/p/theory-base.html

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“The Diffusion of Innovations”
(Everett Rogers/Geoffrey Moore)

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We Must Be Focused: Be Strategic and Results Oriented!
Supremacy of Results: renewed emphasis on RBM/MfDR at all levels  Emphasis on Performance Budgeting that support results by design  Emphasis on Performance Audit  Emphasis on the use of agile technology  Emphasis on abundance thinking…

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

Keep in mind the analogy of the chain…
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A chain is as strong as its weakest link! A community, a country, a society, an organization is as strong as its weakest member

Consider Jim Yong Kim/WB’s pledge for a 3% poverty by 2030 with more prosperity for the lower 40% in every country Consider an “abundance thinking” approach… “Abundance for all”
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What they Say About Focus and Innovation for Results…
“I have no doubt that the world can end extreme poverty within a generation. But it’s not a given and we cannot do it alone. It requires focus, innovation and commitments from everyone.” - Jim Young Kim, President, The World Bank
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“Abundance: The Future is Better than You Think”
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Title of a book by Peter H. Diamandis and Steven 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!)
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Innovation In Leadership and Process for Results!
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Finance is part of the “Process” side of the business of Government Let us remember that to be effective, process must play a supporting role; a difficult balancing 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 or negative impact on government results Let us exercise this power wisely with a results focused great leadership
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Wisdom Nuggets for Great Leadership and Process…
The Beyond the Budgeting Principles; 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 of Visa

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“The Beyond Budgeting Principles”…1
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Change in Leadership Values: Govern through a few clear values, goals and boundaries, not detailed rules and budgets Performance: Create a high performance climate, based on relative success, not on meeting fixed targets Transparency: Promote open information for self management, don’t restrict it hierarchically
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“The Beyond Budgeting Principles”…2
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Change in Leadership (cont.) Organization: Organize as a network of lean, accountable teams, not around centralized functions Autonomy: Give teams the freedom and capability to act, don’t micromanage them Customers: Focus everyone on improving customer outcome, not on hierarchical relationships
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“The Beyond Budgeting Principles”…3
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Change in Processes Goals: Set goals for continuous improvement, don’t negotiate fixed performance contracts Rewards: Reward shared success based on relative performance, not on meeting fixed targets Planning: Make planning a continuous and inclusive process, not a top-down annual event
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“The Beyond Budgeting Principles”…4
Change in Processes (cont.) 10. Coordination: Coordinate interactions dynamically, not through annual planning cycles 11. Resources: Make resources available as needed, not through annual budget allocations 12. Controls: Base controls on relative indicators and trends, not on variances against plan
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What they Say of the Beyond the Budgeting Principles…
“Simple, clear purpose and principles give rise to complex, intelligent behavior. Complex rules and regulations give rise to simple, stupid behavior.” - Dee Hock, Founder & former CEO, Visa

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Guidance for Action 7 Key Elements…
1. 2.

3.
4. 5. 6. 7.

Great Innovative Leadership (develop yourself as a leader and develop leaders around you) Great results-focused vision, goals, strategic results (with Performance Management Frameworks) Right people and agile organizational structure Right resources (budget) to support results Right integrated agile PFM Governance systems and processes supported by agile technologies Quality agile execution and M&E for results Develop and nurture a dynamic citizencentered “innovation for results” culture
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Sources:
1. 2.

3.

4.

Freed from the Budget; by Russ Banham, CFO Magazine; September 2012 2013 Mandate to CFOs: Manage Growth in a Volatile Economy (e-book); Business Finance Magazine The End of Performance Management (as we know it); by Bjarte Bogsnes, Vice-President, Statoil, in Management Innovation Exchange (MIX), June 12, 1012 What Are CFO’s Biggest Issues and Opportunities in 2013?; CFO Sentiment Study; The CFO Alliance
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For Additional Information:


 

 

Email: Jean-B.Sawadogo@LeaderOne.ca 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-inpublic.html DAC-OECD/World Bank: Managing for Development Results (MfDR): http://www.mfdr.org Canadian International Development Agency: RBM info: http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/NAT92213444-N2H#intro Office of the Auditor General of Canada: Performance Audit Manual: http://www.oagbvg.gc.ca/internet/methodology/performanceaudit/manual/index.shtm
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Reflection Point 5…
What is your key take-away from this session?  What are you most driven to apply in your work?  What is your commitment today?  What is the first action that you will take on your first day at work towards your commitment?

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Closing Poll

Budget supremacy
Agile technology Results supremacy

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Parting Words…

“We are what we think. All that we are arises 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 been and ever will be... Let us release our limiting beliefs, imagine and hold the vision, of a world of abundance for all girls, boys, women and men, to become reality, through innovative Public Finance Governance action!
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Our Future Is Better Than We Think!
 It

is up to each and every one of us…  Thank you!  Great innovative leadership!  Safe journey!
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