A tale of water bottles
In the beginning, there was an empty water bottle.
At the time, it was 1998. A couple of Englishmen were trying to fill a bottle, or solve a problem: The bottle they wanted to fill up, was to discover what was to be found “beyond budgeting“. That quest arose from a simple observation: Most organizations were then, at the time, doing budgeting, at least annually. But they were not getting anything out of it. To anyone questioning the prevailing planning practices thoroughly, it would quickly become apparent that “managing by budgets” did not make any sense at all in a dynamic and complex world. So the Englishmen had a feeling that there had to be an alternative to this managing by “command and control”. There had to be some better solution to management, somewhere “beyond budgeting”. There surely had to be some existing practice or model that would enable organizations to get rid of damaging and obsolete rituals like budgeting. In early 1998, the group set off to fill the bottle with knowledge and insights, confident that this would then lead them to a coherent solution.
So it came that the Englishmen, named Jeremy Hope and Robin Fraser, together with Peter Bunce, founded a community of “sponsors“, a membership, which would finance the quest to fill the bottle. The community would soon become known as the BBRT, or the Beyond Budgeting Round Table. And thus the BBRT set out to find organizations that didn’t have budgets and which solved management problems in rather different and “unusual” ways. Few people in the world then actually believed that the bottle could be filled with water. But soon, the Britons came across exceptional companies which were willing to share their experiences. Those were firms like Handelsbanken, AES, and Borealis.
Over the years, the bottle was filled with water.
That happened gradually. The bottle was being filled up, drop by drop. It took a while, but the case research and the thought process and the presentations to the members over time added up to a real solution. In other words, knowledge about the solution to the problem was accumulated and the problem solved, over time.
Drop by drop.
And after 7 years of work or so, it became apparent that the bottle was now almost full. No one had quite noticed this happening, and that the original mission of the BBRT was fulfilled, but it became undeniable. The problem was solved, the research and joint work had solved the mystery of what lay “beyond budgeting”. There was indeed a whole world out there, beyond budgeting! The solution made complete sense, it was coherent in itself and adding up with what other sciences said. And the solution also clearly promised exceptional and holistic performance in a competitive world, as the cases proved.
And then, at some point, the bottle was full. This is NOT the end of the story, of course.
What happened then?
Well, the BBRT community went on discussing about the bottle and how they had managed to fill it up. They showed the bottle around. They shared the insights with the world and managed to convince many people that the solution was well worth looking at. The fact the BBRT had filled the bottle led to recognition and not rarely to applause. But there also still seemed to be a barrier: Organizations somewhat admired the bottle and the water in it, but they didn’t drink it. Or at least not as enthusiastically as everyone within the BBRT had expected. Organizations didn’t start doing what the solution suggested should be done. And consequently, they weren’t able to make use of the solution’s potential. So what was wrong? Why didn’t everybody take the solution and just make it happen?
Robin Fraser was the first in the team to recognize the problem. He reckoned that the solution to the first bottle problem alone wouldn’t do it. All right, the bottle’s rationale was irrefutable; the BBRT´s insights and conclusions were all correct; the cases proved the point. But how would a CEO of a company approach an enormous change such as “management model transformation, towards the beyond budgeting model”, in practice? The mere answer that there was a world beyond budgeting wouldn’t help the management team to overcome their doubts, or to initiate a change process. Nor would the promise alone help change agents to challenge existing structures and practices. The first bottle by itself ultimately thus wouldn’t enable real-world organizations with their real-world management models – although visibly obsolete – to make the change happen.
Some members of the BBRT community previously had approached change anyway, each of them in their own fashion, but they evidently hadn’t got very far,or the changes wouldn’t stick. Some had outright failed to implement the solution, some thought they had actually managed it, but these would suffer a backslash later-on. Many in the community would not try to do implementation, even after years, hesitating, because implementation still seemed too large a challenge. So the BBRT again stood in a fog, having to face a problem. And over time, the fog lifted and it became clear to Robin and others in the group that there simply was more than one bottle. That there was in fact a second bottle, stacked on top on the first one.
And that second bottle was still pretty much empty…
An entirely new problem to be solved
Robin Fraser was the first one in the BBRT to get a full grasp at the second bottle. Robin, the one in the movement who had most experience in consulting, recognized pretty early-on that the second bottle, overall, so far only contained a couple of drops of water. He also saw that while there were a lot of good ideas out there about how to create change in general, there wasn’t, on the other hand, much experience available about something quite as big as transitioning complete management models. There wasn’t much experience about transformation available from case companies either, because those few organizations which had done it in the 70s or 80s hadn’t thoroughly documented the process. In addition, not many people out there would even believe that transformation could be done in the absence of a super-hero-like CEO or company owner. Not even in the BBRT itself the belief in transformation was sufficiently wide-spread. But Robin was firmly convinced in that the second bottle was what now mattered and that it could actually be filled. It was then 2004.
Overall, the situation that Robin and some other like-minded people in the BBRT faced was very much like the situation in 1998: There was a totally fresh problem to be solved. A bottle to be filled, almost from scratch. So that team intensified working on tools and concepts to make transformation happen and to start pouring some water into the newly identified bottle. Robin made a bold and promising attempt in 2004 and 2005 with a company from the Mediterranean, to bring about full-fledge transformation. But it did not yet quite happen.
And there was an additional challenge. While the first bottle problem had been about research derived from cases and science, the second bottle would be more about actually practicing transformation and deriving conclusions from that. While the first required understanding the nuts and bolts of a new management model in theory, the second would be about understanding the nuts and bolts of people changing their organizations, their companies. The new work would be far more “practical”, requiring more diverse skills and a more diverse team. And individuals willing to take huge perceived risks and go for transformation anyway. So what does all that mean for the network and the international membership?
The BetaCodex Network is about that second bottle
It is the next generation of the Beyond Budgeting movement. It understands itself as the BBRT´s logical continuation – but it is different from the BBRT, in several important ways. As understanding of the emerging new model has become wide-spread, we believe now is the time for gathering organizations around the world, independent of their size, industry or location, to make it real. The commitment of the BetaCodex Network thus is to continue the BBRT´s work in a way that is consistent with the need for practical transformation, by filling the second bottle. The BetaCodex Network´s vision is: “The BetaCodex is the standard codex for organizations.” Transformation, in consequence, is for everyone. Period.
Even though the BetaCodex Network and the BBRT are intimately related through the belief in the same model, there are some significant differences between the two associations. For instance, the BetaCodex Network is about to be far more open, collaborative and inclusive than the previous effort, in order to significantly increase the speed of model and method development, deployment and shared learning. This is not just an option. It is a necessity. Because the BetaCodex Network will achieve its vision not through mere research but through application in the real world. Organizations starting transformation need solutions for their real-life problems, and they cannot wait infinitely. The amount of practical innovation needed for transformation over the course of the next years will be immense.
As a consequence, and firstly, the BetaCodex Network has to be “open source”, which means that everyone in the world will be able to contribute to the network’s work (much like on the web-encyclopedia Wikipedia). Being truly open source will enable the Network to capture far more talent and innovative potential than before. Open source also means that everyone in the world can gain access to the full intellectual capital of the network. And that intense collaboration will happen through internet portals and tools.
Secondly, the BetaCodex Network is not commercial. Membership fees will be exclusively dedicated to finance joint network projects, such as the www.betacodex.org web portal, web-based tools, and special membership activities. Fees will not be used for director’s income generation.
It is up to you now
If you have questions with regards to the history of the BetaCodex or the BetaCodex Network, then please get in touch with your peers, through our LinkedIn forum, by email, through the portal´s messaging system, or however you like.