Evergreen Targets and Why Your Business Should Use Them

In this two-minute video, Bjarte Bogsnes (Chairman at the Beyond Budgeting Institute) talks about evergreen targets at Statoil, and why you should deploy them in your own business.

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Read the transcripts

“These are our most important financial targets in the company [Shareholder Return and Return on Capital] – the two KPIs here definitely have their weaknesses, but that is not the point, the point is that we are thinking in relative terms.

“On return on capital there is no target of 11 and a half or whatever, it’s all about doing well against competition. Here are some of the guys we compete with. We are not identical, so this is not as precise as setting 12 and a half, but it’s ten times more relevant.

“We call these ‘evergreen targets’. We’ve had the same ones for maybe ten years now, we’ve moved the one on the right [Return on Capital] up and down a few times, but we don’t need a big exercise every autumn to recalculate this – they stand until we have some other ones. These are probably the closest our board comes to approving a budget.”

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Equinor (formerly Statoil) is Scandinavia’s largest company, with operations in 36 countries and a turnover of 130bn USD. On Fortune 500, the company was recently ranked #1 on Social responsibility and #7 on Innovation. Transparency International has named Statoil the most transparent listed company globally.

In this short video from the 2017 Beyond Budgeting Conference, Bjarte talks about how he implemented evergreen targets at Equinor. This allows Equinor to focus on doing well against their competitors, and they are in place permanently until further notice, rather than trying to set predictions every autumn.

“We are not identical [to our competitors], so this is not as precise as setting 12.5, but it’s ten times more relevant,” explains Bjarte.

You can also watch the full video of Bjarte’s talk, Ambition to Action: The Equinor Beyond Budgeting Journey (20 minute watch).

About Bjarte

Bjarte Bogsnes has a long international career, both in Finance and HR. He is a pioneer in the Beyond Budgeting movement and has been heading up the implementation of Beyond Budgeting at Equinor (formerly Statoil), Scandinavia’s largest company. He led a similar initiative in Borealis in the mid-nineties, one of the companies that inspired the Beyond Budgeting model. He has helped numerous other companies globally getting started on a Beyond Budgeting journey.

Bjarte is Chairman of Beyond Budgeting Roundtable (BBRT). He is a popular international business speaker and Beyond Budgeting coach, and a winner of a Harvard Business Review/McKinsey Management Innovation award. Bjarte is the author of Implementing Beyond Budgeting – Unlocking the Performance Potential, where he writes about his almost thirty years long Beyond Budgeting journey. His new book This is Beyond Budgeting – A Guide to more Adaptive and Human Organizations with a foreword by Gary Hamel is out early 2023.

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