One of the most exciting parts of my work is seeing innovative companies in action. My top five most innovative management teams would have to include energy company Statoil, and their finance organization is certainly one of the key drivers of innovation within the company.
Statoil has not only eliminated budgets but it is in the process of doing away with calendars.
You can get deeper insight into these time-vaporizing innovations by reading the Statoil case study (one that focuses on management innovation) at the Management Information Exchange (MIX). Statoil's story is a finalist for the Beyond Bureaucracy Challenge.
In Statoil's submission, Bjarte Bogsnes, vice president of performance management development (and also volunteer chairman of the BBRT community of practice), discusses Statoil's developments towards a self-regulating management model. You can see the write-up here.
This story also has been chosen as a finalist for the Harvard Business Review/McKinsey M-Prize for Management Innovation. Your ratings and comments can help determine the winner so be sure to vote if you are so inclined. The deadline is Feb. 1, 2012.
There are a couple of comments in particular that captured my attention:
"We could easily put in place a cost program instructing all business areas to reduce costs by a given number. However, I believe such a measure would work against our efforts to build a cost-conscious culture. If we want to become more fit, a crash diet does not work. It takes a change of lifestyle. I believe Statoil is made up of competent, responsible and commercially oriented people who will make the right cost decisions. This means always working hard to reduce bad cost, while protecting good cost. You know better than me what these are and where they are." – Statoil CFO Torgrim Reitan
"We have a management model which is very well-suited to dealing with turbulence and rapid change. It enables us to act and re-prioritize quickly so that we can fend off threats or seize opportunities. This is much more difficult in a traditional ‘budget world.'" – Statoil CEO Helge Lund
You can also hear Bjarte Bogsnes live at the 11th Annual Beyond Budgeting Conference in Houston, April 18-20. I hope to see you there.