There’s a good chance that 20 to 40 percent of your organisation’s spending is wasted.

The best way to tell? Your organisation is hitting budgetary targets and you assume “No news is good news.”

“What’s Wrong With Traditional Budgeting: Confronting the Elephant in the Boardroom”, a white paper by Graham W. Scott, FCA, MCom, looks at how the traditional budgeting system is sabotaging your organisation.

The system expects your managers to predict the unpredictable months in advance and then punishes them if they are wrong.

Knowing this full well, managers build a buffer into their budgets and then spend it to show they needed it.

This leads to waste, loss of strategic focus, and a toxic organisational culture – and all of this might be happening right under your unsuspecting nose.

Graham applies the Theory of Constraints (TOC) systems-thinking tools, originally developed by late business management guru Eliyahu Goldratt, to unpack a universal, uncomfortable truth and proposes a simple, innovative solution for you to mull over as you savour your morning coffee.

Copyright Graham W Scott © 2022

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