Replacing the budgeting model with a more adaptive and devolved alternative is the solution that organization’s need to achieve their goals of becoming devolved networks. Criticizing budgets is not new. But defining a set of principles that guides leaders toward a new lean, adaptive and ethical management model is a new idea – perhaps the first great new idea of the twenty-first century.

Principles of Beyond Budgeting

1. Relative goals and rewards - Set aspirational goals and reward performance based on continuous relative improvement rather than fixed targets.
2. Continuous planning and controls - Make planning and control an inclusive and continuous process based on relevant and open information rather than an annual (and highly political) budgeting process.
3. Resources as needed - Use resources and coordinate actions based on current customer demand rather than annual allocations and predetermined plans.
4. High performance culture - Lead by setting clear principles, boundaries and high performance standards rather than through detailed rules and budgets.
5. Freedom and capability to act - Transfer decision-making scope, authority and capability (including open information) to small frontline teams rather than direct and control operations for the center.
6. Accountability for results - Make teams accountable for improving (internal and external) customer outcomes and relative performance rather than meeting internally negotiated targets.

"Beyond Budgeting" is a set of performance management principles whose adoption leads to more dynamic performance management processes that enables enterprises to be more responsive to opportunities and change and thus create more value. It is a management model that enables greater devolution of responsibility that leads to increased employee and customer satisfaction and superior value creation.