Budgets, Scorecards, Strategy Plans….

For the nth time I came across a client yesterday who had done some very interesting and innovative thinking in their Next 3 Year Strategy/Business Plan. They have also been using Balanced Scorecards (BSC) for some time now. To top it all they have a very good annual budgeting exercise.

 

Painful as it is, however all three of these documents: Business Plan, BSC, Budgets: are set of three different and independent documents.

 

Budget is a combination of inside out (mark up over last year) and outside in (market potential assessment), BSC is arrived at through now almost famous, role holders workshop if you please, and business plan is 300 page document about new strategies and new plans for the next 3 years. There is absolutely no correlation of new strategies on budget…If one was to wonder if the budget would look any different had the business plan not been there…the answer is NO. Would the BSC look any different…NO.

 

Instead of having these as integrated single document, they continue to be fragmented documents. When infact one easy way out is to use BSC as the tool for capturing business plan (hence avoiding 2 separate documents atleast), and then converting the same BSC into a budget, with a line item in budget for every BSC item hopefully. I hardly come across organizations which have a separate line item for key strategies…I often wonder if budget progress is what they are likely to look at million times in a year, when and how they monitor progress on strategic interventions.

 

Problem in my view lies in obsession with templates and hence failing to notice that basis your requirements templates keep changing. Strategies are supposed to define the template and not vice versa ….there is no framework that suggests that line items in budgets remain same even after 20 years, when infact strategies have changed completely. The other large problem is with the failure to travel the last mile in any intervention….the mile that ensures ground preparation for any intention and intervention. Unless on ground simple things like MIS format, aligning review mechanisms to strategy etc is done, pace of progress would never be controllable. Number of strategies hitting the mark and missing the mark would be subject to luck instead of actions.

 

Do you also come across similar situation often..??

 

~~Rohit~~