Jack Welch Said It Best: ‘Financial Budgets Suck’

Guest blog by Steve Player, program director, Beyond Budgeting Round Table

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Steve Player, Program Director, Beyond Budgeting Round Table

If you’ve heard me speak before, you probably heard me attribute the quote “budgets suck” to former General Electric CEO Jack Welch (for more on this, see Jack Welch’s book, “Winning,” pages 189-204).

The quote usually receives a strong audience reaction.  It is a relevant question for all of us in finance to as ourselves. If your answer is also “yes,” then we need to ask “why?” And then, “what can we do about it?”

Watch the webcast, “The ABCs of Lean Finance: Practical Strategies for Increasing Your Productivity and Value”

These questions came up last month when I led a workshop at the Lean Healthcare Transformation Summit, which is jointly produced by Lean Enterprises and the ThedaCare Center for Healthcare Value (TCHV). To kick-off the event, TCHV Chief Executive John Toussaint described various parts of his new book “Management on the Mend: The Healthcare Executive Guide to System Transformation” before 650 attendees.

The book includes a chapter on Lean Finance; specifically, how healthcare organizations are moving beyond traditional budgets. John used a variety of video excerpts to describe how these organizations are eliminating traditional budgets. Lean finance can help you get rid of inefficient and duplicate processes so that you can boost your productivity and better serve your internal customers.

John even included one excerpt from the Beyond Budgeting Round Table (BBRT) DVD, “Moving Beyond Budgets: How Finance can Support Operational Excellence,” which provides seven reasons why organizations are eliminating annual budgeting.

Each point within the DVD provides a headline (i.e. Budgets cost too much) and an explanation (i.e. costing out your internal budgeting efforts realizes a staggering amount of costs). And as Toussaint got to the seventh point, he played the headline “Budgets Suck,” but skipped the explanation.

Watch the webcast, “The ABCs of Lean Finance: Practical Strategies for Increasing Your Productivity and Value”

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