UNWIND

THE BEST INTENTIONS

Best Intentions: Kofi Annan and the UN in the Era of American World Power. By James Traub.  Farrar, Straus and Giroux; 464p; $26

THE BIRTH OF PLENTY

by William Bernstein, McGraw-Hill. Best selling author of The Four Pillars  of Investing.

History would tell us that the Catholic Church put such fear into the people that even the most painful exit from life (even being burnt at the stake) was better than the fear of eternal fires of hell.

A WOMAN'S WORK IS NEVER DONE

Try typing the above heading on the web and you will get over 26,000 postings.  Much of what you will see is great success stories how women have broken off this dilemma or just another tale that a woman's work is never done. However, the web search may not in reality tell you that a woman's work is never done, yes, never done. We have to look just farther than North America and most of Europe and the living reality is that a woman's work is never done.

THE POLITICS OF SMALL THINGS

The theoretical implications of the global changes in our recent past go beyond these large-scale transformations and geopolitical challenges. It is in the micro-structures of social interaction that the innovations of political culture become apparent, as these innovations, in their interactive contexts, constitute public space. These micro-structures and more, suggest Professor Jeffrey C. Goldfarb in The Politics of Small Things form the foundation of democratic culture.

Politics cannot be separated from development and it is the small things that matter most. UN international civil servants will find the Politics of Small Things a great read that will give enough pungent theory of that part of sociology that will also enhance development progress. The book is available at Amazon.com from 1 April 2006

This also reminds me of the economics text Small is Beautiful by E.F. Schumacher, a timeless text, valid twenty-five years ago, still good today.

THE CRAZY AMERICAN - JIM GRANT

BOOKSHELF: The Crazy American

JIM GRANT- UNICEF VISIONARY (172 pages, US$10.00) by Maggie Black

From my 18 years of service with UNICEF in New York I had the privilege of observing Jim Grant at fairly close quarters for at least five consecutive years.

I doubt that there could be a better book to provide a documentary of the immense contribution Jim Grant made to the women and children of the world as the Executive Director of UNICEF. The book clearly epitomizes how Jim catapulted UNICEF in to world fame, not just by any form of advertising but by mobilizing all possible resources to make things happen. Jim set high targets, a hundred percent return was too small an achievement – it was quantum leaps that mattered. The narration of the events in the book and their success reveals quite clearly the dynamism of Jim Grant. A man who was restless until the perils for social development was overcome. The book clearly emulates Jim Grant as a man of immense energy and completely selfless.

On management style, Jim Grant gave people the freedom to offer ideas to make the Organization move forward. Mr. Grant encouraged people to say what was really on their minds. People were allowed to give voice to their ideas that had been buried inside them. In other words, people had people freedom to pursue their dreams. In that way staff were focused and inspired to keep an even flow of new ideas. To draw ideas from the staff, Mr. Grant organized suggestion schemes and gave awards for the best suggestions. In one of those first suggestion schemes, I won first place and was personally given a personal cash grant by Mr. Grant (in addition to the reward awarded on UNICEF account).

General meetings, for example, offered opportunities not only to inform staff about new programs or directions but also to address cultural and staff issues on a broad scale to motivate people and keep the Organization “people happy.” This was easy for Mr. Grant as he had a vast global experience and understood other cultures very well. At these meetings, interventions from staff of all levels were allowed.

Of course, the success of UNICEF meant that Jim Grant had a great team behind him. It would have been difficult for some of the writers to mention of their own contributions and assistance rendered to Jim. Mr. Grant often acknowledged how great his team was. Jim had visions on how to solve the current difficult problems and in the process moved mountains to achieve them. And Jim Grant had another vision – the vision to select the right people to the senior positions in the Organization.

As the leader of UNICEF Jim Grant was like a navigator, he always had one eye on the current position and the other eye fixed on the horizon. Mr. Grant did an extraordinary thing – he went back to the drawing board. Jim Grant had not only visions for solving the difficult development problems of the present; he also invented the future of UNICEF. Jim Grant knew to take the future map of UNICEF and make things happen even before their due date. Such impatience while it made the staff of UNICEF swoon, it brought great benefits to the human beings of the developing world. In the mind of Jim Grant there was no problem that can’t be solved, no status quo that can’t be bettered. Mr. Grant was always upbeat and self-confident because in addition to his immense capabilities he also had immense experience of developing country settings. The book covers all these talents very well.

There are people who are visionaries and people who are bookkeepers. Jim Grant was truly a visionary. Mr. Grant had great imagination to bring UNICEF from a supply oriented Organization to the center stage of social development. Even in his last months on planet earth Jim Grant believed that a sense of purpose and creativity was the best medicine for the illness that he had.

The book is a great testimony of Jim Grant the Visionary. Matching the ideals and success of Jim Grant would be a challenging task for future leaders of UNICEF. The book is thus a wonderful addition to the literature of successes in global social development and the achievements of an extraordinary person.

Jim Grant the Visionary is a book that must be on the bookshelf of every family home in the world.

Merrill Cassell - Former Budget Director of UNICEF

BEYOND BUDGETING - WHO NEEDS BUDGETS

by Merrill Cassell

            New research reveal that benchmarking, continuous financial planning and forecasting are a better way of maximizing performance than chasing after targets/goals of a fixed performance contract embedded in an annual fixed budget.  By devolving power to the front lines, performance is further improved. 

            Many companies still use the annual budget process as the top management tool to guide performance.  The budget improves the accuracy of the unknown future they contend.   However, what they do not comprehend, is that the fixed performance contract in the budget clouds their vision of what else is happening in the market place in this rapidly changing world.  The money and time spent in organizing and preparing will go to enhancing productivity- like, improve sales, increase profits, improve product/service production time and quality, reduce costs and give better credence to intellectual capital.

            The changing market place is the response to a rapidly changing environment.  This calls for rapid business changes.  The only way that a company can make rapid changes is by being more adaptable; thus the call for more adaptable organizations and systems.   With a fixed performance contract, the focus is on fixed value-line that ignores what else is happening within and outside the company.  Instead of changing and adapting to the market place, company officials keep chasing after fixed budgets and fixing their criteria to reach the budget targets.  To change and adapt you cannot deal with an annual budget and an annual fixed term performance

            Organizations that have embraced (or are embracing) the Beyond Budgeting Round Table (BBRT) model have come to concede that there are fruitless limits to the budget inputs.  After all, if what is in the budget does not make sense when the facts in the budget make no sense of the current environment.  Most people apply a lot of sophisticated analysis and modeling to make sense of the budget, but the models break down due to information overload.  Executives invariably ignore the detailed analysis and in a time-crunch end up reducing the budget by selectively focusing on some targets of personal interest (politicizing the budget) or make adhoc reductions.  The budget is not pure anymore.   According to research by Hope and Fraser, budgets are prepared with data of yesteryear, personal views, gaming, politics, satisfying hierarchies (telling what the boss would like to hear) rather than focusing attention to the reality of the day and adapting the organization to meet those changing needs.

            The truth is, in this fast changing complex world, much of the information in the budget is stale before the ink is dry on the print.  However, the budget has abundant information; most of that information is irrelevant and has no real implications to meeting the near-term and long-term needs of the organization.  By sticking rigidly to a fixed performance contract, in the end, organizational performance could significantly deviate from the competition.  When this happens, the organization tends to call in many reorganization experts to fix the problem.  The experts usually, literally reorganize by dismantling and restructuring with heavy layoffs, some rational, but most irrational.  This breaks the spirit of the organization and results in a nervous and demoralized workforce.

            As the BBRT model points out, the role of senior managers is simply not to make decisions, but to set direction by focusing on a few key performance indicators (KPI’s) and motivating and empowering staff to meet those KPI’s, instead of chasing ambiguous targets in an irrelevant budget.   With fast actuals, management must review what had happened in the last quarter, what is bound to happen in the next quarter and adapt work processes, systems and intellectual property to have a clearer framework of how to meet the newest set of challenges in a rolling short-term and long-term forecast.

            Therefore, which are the conflicting views – detailed budgets or without budgets – which view is the right one?  Jeremy Hope and Robin Fraser present empirical evidence that cast light on the debate.  Case studies show how companies have disbanded budgeting for an alternative adaptive model.  A management system of managing without budgets that makes financial forecasts more durable...  Making the change is by no means trivial.   The biggest challenge is changing people’s perceptions of managing organizations without budgets.  Hope and Fraser call it the “change of mindset.”
            

            The book: Beyond Budgeting – How Managers Can Break Free from the Annual Performance Trap, by Jeremy Hope and Robin Fraser (Harvard Business School Press, 2003) can change your mind forever from traditional forms of budgeting.  Although much of the book is devoted to the private sector, the principles recommended are adaptable to the public and nonprofit sectors as well

Merrill Cassell

Former Budget Director of UNICEF.

link: www.bbrt.org