It’s the time of the year to finalize next year’s budget — ideally anchored by renewing your strategic vision and plan for your business.
Here are some key areas where companies miss the mark when doing their planning.
Vision is more than a statement. It is a clarification of what the business is supposed to look like in the future. Think three, five and even 10 years out. Is it clear where you are going with the business, and does everyone understand it and believe in it? What are the big objectives you are trying to achieve over the medium and long term? You must clarify this in order to anchor your plans with a clear direction.
Strategy is still crucial. Just because Peter Drucker said “Culture will eat strategy for breakfast” doesn’t mean you should ignore strategy (unless you want to lower your sights and ignore our fast changing marketplace.)
Strategy is the toughest part of strategic planning (sounds funny when you read that, right?) The reason being that we put so much focus on processes and vision, that we don’t do the really hard work in thinking through and defining a strategy that truly springs your company forward! A good strategy will dictate how to solve key competitive, organizational and financial challenges. A good strategy will position your company for a strong future.
Just to be clear, “growing sales” is not a strategy; while sales will cover up some of your sins, it won’t actually fix them.
Process won’t solve people problems. The E-Myth turned everyone into believers that processes would solve all your entrepreneurial woes. Did you know that the E-Myth Co. actually discovered that its own growth hit a glass ceiling because it overly focused on process? So now it puts people first, which, by the way, is the name of a chapter in my book, “Become A Destination Company.” (The chapter is called “People Systems First.”)
You definitely need processes to create accountability around your strategy, and your strategic plan should define those accountabilities and confirm those processes. But don’t forget the people equation. The difference between the good companies and the truly great companies are their people and how they work together as team. Amen.
Good luck developing your budget this year, remember you have to “aim high in order to hit high.”
