Fall Budget, ugh!
If that’s your reaction to this annual business ritual, have you ever asked yourself why? After all, what could be more rewarding than planning the company’s future?
INSIGHT – One question kept bugging me: What causes the entire organization to dread the fall strategy season? After pondering this with a wide range of leaders, it comes down to one word: Uncertainty.
Uncertainty. Most people don’t deal with it well. Look at what we asked them to do each fall:
· Predict the economy and competitors
· Figure out what leadership expects
· Come up with growth assumptions they can’t measure or believe
· Project new product acceptance, spending, and margins
· Work in finance’s 5th new process in five years.
They hate it. Then their bonuses are tied to the outcome. Way too much!
When it's finally done, the Plan seems to go on the shelf, until bonuses are calculated.
OUTCOME – If we can reduce the uncertainty, we can create more engagement and value for strategic planning. The answers are in your data. You’re not asking the right questions. Here are a few suggestions:
1. Confirm and measure what drives your business. Too often conditions are assessed based on different leader’s different guts. Real economic and market measurements are not directly correlated to real performance.
2. Know your customer, and their trended behaviors. How do you segment them? How’d you win the new ones? Who’s buying more or more products? What’s your retention rate? Real data help identify growth strategies. Are sales driven by customer acquisitions, new products or new capabilities?
3. Link sales and profit growth to measurable strategies. Defining clear business outcomes, how to achieve them and how to measure them will focus the organization on what is most important and drive operational reporting.
4. Align rewards with critical KPI’s. What gets measured, get done. What gets done well, should be rewarded.
This is not easy stuff, and if done comprehensively, can take months. Fortunately, there are a lot of terrific small consulting companies who can provide invaluable perspective without breaking your new budget. Data2Profit is one, and I’d be happy to share our unique approach.
We start with your data to create real intelligence. Nothing artificial. Call us today to learn more about our difference.
Be more certain about your plans. And Go, Pack, Go!
Wishing you continued success,