If you only read one thing this week…

Why budgeting fails, and what we can do about it. by ifyouonlyreadonethingthisweek
March 27, 2008, 6:11 pm
Filed under: accountability, Articles, governance, If you have 30 mins, Management

Our own Tori Gilbert summarizes Harvard Business School’s paper by By Prof. Peter Horvath and Dr. Ralf Sauter.


The traditional budgeting process is counterproductive. It is inefficient, rapidly becomes obsolete, doesn’t motivate the right behaviors and is out of sync with strategy. Traditional budgeting is especially not suited to the realities of dynamic markets, making it difficult to implement budget adjustments called for throughout the year.

To be most useful in a dynamic marketplace, budgeting must integrate with and support strategy. The authors propose six guiding principles for an advanced budgeting system that optimizes the roles of budgeting while supporting strategy execution:

1. Align budgeting to strategy.
2. Link relevant nonfinancial performance measures to budgeting.
3. Reduce detail through the use of aggregated budgets.
4. Use rolling budgets instead of fixed budgets—a continual planning process, frequently updated and adaptable to changing conditions.
5. Use relative targets instead of fixed budgets to reward people–measuring success by comparing performance against relative, self-adjusting performance measures. Relative targets can motivate the right behavior, guiding people to act in an organization’s best interest.
6. Increase the focus on cross-functional core processes instead of departmental and organizational unit performance. This leads managers to be more attentive to organizational strategy and goals, and fosters collective effort and teamwork instead of internal competition for resources.

The Balanced Scorecard (see links below) is described as a helpful alignment mechanism. The Balanced Scorecard can supply the coordinating functions for budgets by communicating strategy to managers and give them direction; it can help managers oversee strategic initiatives and link them to financial activities. The BSC’s clear depiction of strategic priorities helps to set firm guidelines for budget planning. When implementing the BSC, it is crucial to de-emphasize the importance of budget-related objectives to the benefit of BSC-related objectives, while reducing the level of detail in the budget—otherwise you’ll only double the work and increase the frustration level.”

Read the article here.

Read the Wikipedia article on the Balanced Scorecard approach here.


The White Man’s Burden by William Easterly – reviews by ifyouonlyreadonethingthisweek
March 20, 2008, 4:31 pm
Filed under: Book reviews, If you only have 15 mins

William Easterly’s book explores “Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good”  – Easterly is contributing to a long genre of literature that complains about the failings of development aid, and, unlike some, has some proposals for fixing it.

Critical of traditional aid efforts and charity, and with special vitriol for Jeffrey Sachs and The End of Poverty, Easterly’s thesis is that modern aid efforts are largely the descendants of colonial efforts to ‘civilize’ their native charges (hence the Kipling reference in the title). He draws out two types of development approaches – top down ‘planners’ and bottom up ‘searchers’. The approach he favors will come as no surprise, but his specifc remedies are controversial.
Monday Developments February 2008 issue carries a review by Nancy Birdsall (founding president of the Center for Global Development). Read the review here (unfortunately you’ll have to download the pdf of the entire issue, the review is on page 16, fortunately, it’s a good read). You can also read the Washington Post’s review of the book here, and order the book here.

UN launches a huge new database by ifyouonlyreadonethingthisweek
March 5, 2008, 5:49 pm
Filed under: If you have time for longer reading!, Web sites

We’re a huge fan of GapMinder, and it seems that they have made a step forward in their quest to get the UN’s databases online and accessible.

UNData “has just launched a new internet-based data service for the global user community. It brings UN statistical databases within easy reach of users through a single entry point. Users can search and down load a variety of statistical resources of the UN system.”

“The UN-system has accumulated over the past 60 years an impressive amount of information. UNdata, developed by the Statistics Division of DESA, is a new powerful tool, which will bring this unique and authoritative set of data not only to the desks of decision makers and analysts, but also to journalists, to students and to all citizens of the world, ” says Sha Zukang, Under-Secretary-General for Economic and Social Affairs.

The project has been developed in partnership with Statistics Sweden, the Gapminder Foundation and with partial financial support from the Swedish International Development Cooperation Agency. This is huge – it puts an enormous quantity of great information out there – go explore, and post back with the highlights that you find!

Gallup Center for Muslim Studies Poll of the Muslim World by ifyouonlyreadonethingthisweek
March 5, 2008, 2:46 am
Filed under: Development theory, If you have 30 mins, Megatrend

The Gallup Center for Muslim Studies is a nonpartisan research center dedicated to providing data-driven analysis, advice, and education on the views of Muslim populations around the world. Their polls ask Muslims about their beliefs regarding education, religion, democracy, culture, financial prosperity, and the media.Their latest report has some interesting findings – it is broken into five main sections:

1. Ordinary Muslims

2. Islam and Democracy

3. Muslims and Americans: The Way Forward

4. Moderate vs. Extremist Views in the Muslim World

5. Perspectives of Women in the Muslim World

All the reports are available in Arabic and English. Some of the more revolve around the commonalities between opinion in the US and the Muslim world – the things that both groups like and dislike about the western world are strikingly similar, as is the importance of religion in society and the concern at the breakdown of family structure.Another interesting finding is that Muslims holding radical views about the west are no more likely to be deeply religious than their more moderate counterparts. Indeed, they tend to be better educated, wealthier and politically active – a profile that more closely fits political revolutionaries than radically religious activists. Read the full report here.