I love the Fall. The seasons are change and we start thinking about the holidays. Right, well maybe for most of us, but for those managing a business While that is true for most, there are others with a bit more harried view of Fall. These folks are just finishing their budgeting process reaching their limits during negotiations on goals, plans and budgeting assumptions. For those in management positions, this time of year can be tough. You want to end this year exceeding goals, and you want to create a plan and budget for next year that will do the same.
As budgets reach the final approval stage, a question that comes up: Will the next year unfold as we have planned? If I was a betting person, I might consider a wager against it. This is not a slight on the planning effort, but typically as soon as the plan is final (and sometimes before), it starts to fall apart. Sometimes it’s because key assumptions were based on out-of-date thinking; sometimes it’s because the market is shifting so quickly that it is hard to stay on top of the waves of constant change; and sometimes it’s because there has been no real strategy development in your planning process; the planning consists of last year plus.
So, how can you strengthen your strategic thinking even if you did not engage in strategic planning this year? Tactical Management
I have three tactical management tips to help:
1. Leave room to respond to emerging issues. As you complete your budget, leave some capacity to flex. This typically means saying no to something proposed in the plan that can or should wait. It could also mean setting aside a budget for responding to opportunities. This is not padding the budget. Padding is a game almost all seasoned managers play to ensure they hit their goals and get their bonus. Leaving capacity in your plan and budget is a more strategic move. To do this, you have to think about where you can say “no” AND allocating funds to do something you have not planned to do.
2. Educate your teams about the budget. From the accounting and performance management perspectives, budgets are viewed as ways to control resources and align activities to objectives. These are very important outcomes of the budgeting process, especially in larger entities. But, if that is the limit of how your entity uses its budget, you are missing a huge asset to foster strategic thinking. Take the time to share the budget and its goals and assumptions with your team, so it is well understood. By engaging them in the budget, and the thinking behind it, you may encourage them to improve upon it throughout the year. When leaders seek engagement over control in the annual planning and budgeting process, they experience tactical brilliance that produces stellar results.
3. Look where you are going, not where you have been. All planning efforts include a review and evaluation of the status quo. That is a key step in planning: the assessment, but don’t stay in that mindset once the plan is set and the budget has been approved. This is 100% the time to look ahead. Leadership is not about “polishing the stone”. It is about seeking out new opportunities and positioning your entity for long-term success. As you move into the implementation of your plan, be sure to keep your eyes trained on where you want to go, not just the activities of your plan. You need to identify, explore and evaluate emerging opportunities and if they are worthy, act to integrate them into your operating plans as soon as possible. If you have used tip #1 above, you will be able to flex without too much disruption. If not, you will have to re-prioritize to fit a new priority in. But if you are looking at perfecting what you have been doing rather than looking ahead to where you want to go, you may find out too late you missed something.
Get ahead of your planning for next year today!