Alexander Roos, James Tucker, Fabrice Roghé, Marc Rodt, Sebastian Stange

A company’s culture is frequently at the heart of mismanaged planning, with management often rewarding the wrong behavior. Because financial incentives are still frequently tied to the achievement of short-term plans, employees can feel pressured to negotiate financial goals and to sandbag. Consequently, planning begins to feel like a bazaar instead of the organized, top-down process it should be. Employees may be motivated to reach … [ Read more ]

The Art of Risk Management

We worry that in their headlong embrace of formal systems of risk management, many companies are pursuing a highly technical approach to risk management—characterized by complex financial models and elaborate, formal risk-management systems—in isolation from the day-to-day activities of the broader organization. The result is that risk management may exist as a formal function, but it is not really embedded in the “mindset” of the … [ Read more ]

The Art of Planning

Since businesses face more aggressive competition than ever before and have to assume increasing risk, they need to prioritize their deployment of resources even more carefully and govern their wide-ranging global activities more diligently. Smart planning has never been as important as it is today.

In this Focus, we delve into the changes and challenges that have altered the context in which companies must now undertake … [ Read more ]

The Art of Performance Management

At most large companies, the performance management system is a hodgepodge of legacy systems. KPIs are not aligned across the organization. Different information systems categorize data differently. Decision rights as to who decides what data to collect are so distributed that there is no consistent approach to reporting across the entire company.

As a result, the finance organization spends an inordinate amount of time simply putting … [ Read more ]

The Art of Risk Management

Risk management isn’t just a matter of complex financial models and formal risk-management systems. It is an essential value-creating activity that should inform the strategic debate at every level of the organization. Here are ten basic principles that should govern “the art of risk management.”