Are We Managing Too Much?
Statoil, Scandinavia's largest company, boasts revenues of US$90 billion and has 21,000 employees working in 36 countries. Fortune magazine ranks Statoil only 67th on size but 1st on social responsibility and 7th on innovation. In the last 10 years, the company has consistently performed above its peer average on shareholder return and return on capital employed (ROCE). Statoil has recently developed a radical new management model based on the Balanced Scorecard that we call Ambition to Action, which emphasizes a self-regulating, business-driven approach. The company abolished traditional budgeting in 2005 and decided to leave the calendar year where possible in 2010. What prompted us to make such counterintuitive moves? A story from the Netherlands suggests some answers.