Agile Budgeting Works

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An Agile approach to budgeting recognizes the need for frequent course correction by outcome owners who can respond to the business when they have autonomy. It favors accountability over expenditure tracking; it's using road intersections with roundabouts (cooperation) rather than traffic lights (compliance).

The budgeting recommendations discussed here may seem new and radical. Far from it — they have been successfully implemented at a 142-year-old Swedish bank called Svenska Hadelsbanken since 1970. With profits of over two billion and a track record of never needing government bailouts, its public annual report for 20139 states:

“We work without budgets, central sales targets, or broad, traditional marketing. Instead, we apply a highly decentralized working model, where each branch has a high degree of autonomy on its local market. Consequently, it is our branch managers who take the majority of important business decisions in the Bank.”

In other words, the branch manager functions as an outcome owner with corresponding autonomy and accountability. Handelsbanken is one of over 25 members of a research network called the Beyond Budgeting Round Table10 established in 1998 in response to growing dissatisfaction with traditional budgeting.

Rolling with Agility

One good practice is to take a monthly or quarterly rolling approach to budgeting. For …

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