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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.
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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.
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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
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P i A l i
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Privacy AnalyticsSample Customers
State of Louisiana
Department of Preventative Medicine
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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
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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
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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
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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
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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!
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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
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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?
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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)
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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
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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
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Th Diff i f I ti
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The Diffusion of Innovations(Everett Rogers/Geoffrey Moore)
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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
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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
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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
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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!)
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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
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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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The Beyond Budgeting
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The Beyond BudgetingPrinciples2
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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The Beyond Budgeting
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The Beyond BudgetingPrinciples3
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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The Beyond Budgeting
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The Beyond BudgetingPrinciples4
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
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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
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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
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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]7/28/2019 Thinking Outside the Budget Box: Financial Governance Innovation Thoughts on Moving Beyond the Traditional Budget
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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?
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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 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!
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Our Future Is Better
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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!
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