Budgeting: A declaration is not a strategy
Budgeting season is coming soon for many companies, and this usually includes the review of major initiatives, costs, resources, and activities for the coming year. Sometimes, it’s also the time to re-evaluate the organizational strategy or even create a new one. And while creating a strategy can be a daunting task, many leaders actually go through long and convoluted processes to create one, only to shelve it in a matter of months.
This can be incredibly frustrating. Why go through weeks and months of effort to create a so-called strategy that you aren’t even used to guide decisions during budgeting and planning? Why have a strategy that never gets implemented, or just becomes that “document we made a while back” which is periodically referred to but no one understands what it really means to their department?
There are usually many factors at play in these situations, but more often than not, the strategy isn’t a strategy – it’s a declaration. In short, a strategy is created in a bubble by upper leadership, a document is created that is extensively wordsmithed and then thrown over the fence to the organization in a big town hall meeting.
A declaration isn’t a strategy. Crafting a strategy – especially a corporate strategy – is just the beginning, not the end of the process. Thinking that the organization will understand the nuances and thought processes behind something that took you months to create, will be digested and translated in 20 minutes is folly. Your declaration that “this is the strategy, go forth”, doesn’t equip your department leaders with anything other than a 50,000-foot, general idea of what the organization is trying to achieve. That idea must be translated into department-specific business strategies to turn it into action.
This doesn’t mean you tell your teams, “Hey, now that you have the corporate strategy, put together your budgets and activity plans and make sure they align with the strategy.” The magic of a strategy comes with taking that strategy you’ve defined and determining how each department can creatively amplify it. In short, this means they need to craft their own supporting strategy.
For example, say your corporate strategy includes a component declaring, “Our people are our most important asset, and we will focus on attracting the right talent and building a culture of execution.” What does that mean for HR? What does that mean for product development? What does that mean for project management? The declaration is so broad and lofty, it has very little meaning. How should this get translated into a competitive advantage? Or is this really just frustration about launches missing their deadlines and current attrition numbers? Then it’s not really a strategy at all.
Strategies fall flat for a variety of reasons but don’t fall into the declaration trap. Even if you’ve spent countless hours creating your strategy, it will be useless without taking the next step in helping each of your departments translate it. This doesn’t mean telling HR to “improve the application process”. It means discussing in depth what types of talent you need and why, what those people are looking for, where they can be found, and what other organizational elements need to change to meet their needs. Only then might your “declaration” actually become a strategy that creates real outcomes.
About the Author
Andrea Belk Olson is a keynote speaker, author, differentiation strategist, behavioral scientist, and customer-centricity expert.As the CEO of Pragmadik, she helps organizations of all sizes, from small businesses to Fortune 500, and has served as an outside consultant for EY and McKinsey. Andrea is the author of three books, including her most recent, What To Ask: How To Learn What Customers Need but Don’t Tell You, released in June 2022.
She is a 4-time ADDY® award winner and host of the popular Customer Mission podcast. Her thoughts have been continually featured in news sources such as Chief Executive Magazine, Entrepreneur Magazine, Harvard Business Review, Rotman Magazine, World Economic Forum, and more. Andrea is a sought-after speaker at conferences and corporate events throughout the world. She is a visiting lecturer and startup coach at the University of Iowa, a TEDx presenter, and TEDx speaker coach. She is also an instructor at the University of Iowa Venture School.