Message-ID: <19969663.1075862451259.JavaMail.evans@thyme> Date: Tue, 20 Nov 2001 11:51:54 -0800 (PST) From: hbr.625@hbr.ed10.net To: vkamins@enron.com Subject: Corporate Budgeting Is Broken -- Let's Fix It Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "Harvard Business Review OnPoint" @ENRON X-To: vkamins@enron.com X-cc: X-bcc: X-Folder: \VKAMINS (Non-Privileged)\Kaminski, Vince J\Deleted Items X-Origin: Kaminski-V X-FileName: VKAMINS (Non-Privileged).pst From the Desk of George W. Pratt, III, Director Harvard Business School Publishing Corporation Boston, Massachusetts Tuesday, November 20, 2001 Dear Wincenty Kaminski: On November 7, we wrote you regarding CORPORATE BUDGETING IS BROKEN--LET'S FIX IT, a new "Harvard Business Review" OnPoint article. We wanted to make sure you had a chance to respond before this special offer closes. The original offer is presented in its entirety below. If you are simply not interested, we apologize for the intrusion. -------------------------------------------------- Are your managers lying, cheating, and scheming? Probably--if you tie their bonuses to budget targets. In the name of corporate budgeting, are people working against your company's best interests? Consider this all too typical story: To meet a quarterly revenue target, managers at a heavy-equipment manufacturer shipped unfinished products from their plant in England to a warehouse in Holland, for final assembly near the customer. The managers earned their bonuses--but the high cost of assembling the goods at a distance eroded the company's profits. It doesn't have to be this way--if you take radical action. No, don't eradicate budgeting--the budget process itself isn't the problem. Rather, it's the use of budget targets to determine compensation that wastes time and encourages deception. So, sever that budget-bonus link. Reward people for real performance, not just their ability to hit targets. The new "Harvard Business Review" OnPoint article "Corporate Budgeting Is Broken--Let's Fix It" reveals how to keep your managers honest. In addition to the full-text article, a one-page distillation and annotated bibliography are included. To order this article, visit: http://hbr.ed10.net/ud/JFKE/XTD4/JIOU/XL/O5QHD To explore this HBR OnPoint article and related products on this topic further, visit: http://hbr.ed10.net/ud/JFKE/OJAC/JIOU/UP/O5QHD At the HBR OnPoint Web site, you'll find material to help you quickly explore, share, and apply cutting-edge ideas from the "Harvard Business Review." You can download, save, and share the 1-page HBR OnPoint article distillations and exhibits with your colleagues. Sincerely, George W. Pratt, III Director P.S. Please forward this message to others in your organization who would find this "Harvard Business Review" OnPoint title useful. Thank you. If you wish to unsubscribe from special offer mailings, please click here:http://hbr.ed10.net/us/JFKE/HD/JIOU/O5QHD/dmthbWluc0BlbnJvbi5jb20=/ ((6483)) [[JFKE-JIOU-O5QHD-D]][IMAGE]