Are you really using the budget conversations to create new value?
As a former finance executive, I have been through numerous rounds of budget conversations and often felt frustrated by the process and the inability of our teams – including myself & my team – to provide fresh thinking and create new value for the business.
Executives agree that a budget process should be externally focused, tied to the strategy of the organization and drive action to meet those strategic objectives –which is great on paper and sounds like the budget process supports the creation of new value.
But how often can you actually notice the corporate gravitational pull towards playing it safe and writing next year’s story as an extension of the past – a little more of the drift?
If you are interested in interrupting the drift and the pull toward a predictable almost-certain future, you can take on engaging your people in a new set of conversations:
- Reveal the context and assumptions that have become “the way we run the business around here”. In all organizations, there are current (embedded and hidden) sets of beliefs, assumptions, truths, and unwritten rules that determine what people see as possible, the actions they take, and the results they produce. These include all assumptions along the value chain: how you develop, manufacture, and distribute your products and services. These also include the conversations we hold on to about the budget process itself and “corporate” expectations.
Are you encouraging your people to elicit and challenge these assumptions that can be myths masquerading as truths?
2. Unhook from the pervasive drive for what is familiar and known. Without disengaging the prevailing context and mindset, anything new will immediately be retranslated into the old way of thinking and acting, or will just be ignored.
The latest research in human brain science shows that human perceptions are shaped by past experiences. Indeed, there are times, when you and I do not see what is right in front of us.
Are you engaging in budget conversations that help to “correct corporate myopia”?
- Invent from the future. Once this is understood and acknowledged, you can engage your teams in conversations that create the future from the future, with a fresh look at your business model and the market dynamics: the current and emerging trends and the opportunities they will generate.
Are you creating next year’s outcomes as a proprietary future you are committed to?
- Implement the future now. As part of fulfilling the future, people can design and implement the appropriate structures, ways of operating, and practices that will be a match for the future and deliver performance and results that had been considered unlikely or even impossible in the previous context. All too often we first plan for the future without thinking about implementation right at the start and involving the key people who will make it happen.
Are you opening up the budget conversations to all relevant stakeholders in the organization, involving them in the co-creation of what it will take to execute the future?