By Jeff Davies – 20Twenty Leadership Programme Tutor.
People often say that there is no point in planning when the future is so uncertain. This is a mistake and misunderstands the purpose and the process of developing a plan.
There is no truer saying than “a failure to plan is like planning to fail”.
The planning process is perceived as being a financial exercise to develop a forecast balance sheet, profit and loss account and cash-flow statement. However, so much more can be achieved if the process is approached with a broader agenda.
Involve Your Staff
The budgeting process should be seen as a behavioural exercise with the process itself having great merit.
Your business is only as good as your staff. You manage people who do the work, therefore, it’s important to involve them in the planning process.
The output from the planning process is the Master Budget, but it can be far more than that. Consider the following:
- In most companies, staff do not know or understand the objectives. Clarify objectives and ensure staff are involved and understand the vision of the business. These are not easy issues to discuss, and many businesses refuse to engage in what they regard as “soft skills”.
- By understanding every variable in your organisation, you will be best placed to react to unplanned changes that will inevitably take place.
- The more staff that are involved, the data collected for the budget will be of better quality.
- It helps to coordinate activities and provides participants with a more rounded view of the organisation. This can help employees focus where they can best use their knowledge and skills to achieve the company objectives.
- It is an ideal vehicle for training younger staff and addressing the issue of succession planning.
- It can build loyalty and increase employee engagement.
The last point relating to employee engagement is recognised as being one of the biggest drivers of increases in productivity.
Research in all the major economies of the world has shown that:
- 75% of people voluntarily leaving their jobs don’t quit their jobs, they quit their bosses.
- Only 40% of employees know about company policy, goals and strategy.
- Highly engaged employees are 87% less likely to leave.
- 90% of leaders think and engagement strategy can have an impact on business success but only 25% of them have a strategy.
The message is clear; start seeing your planning process as a method of increasing employee engagement and gaining all the benefits that come from increased employee engagement.
Communication is the key and your organisation chart is the first step in planning how this communication is to take place. The education of middle managers is also crucial as these are the people who will be passing on your message.
In so many post graduate programmes finance is treated as almost a separate standalone module. On the 20Twenty Programme we recognise that financial success is based on sound leadership principles and these principles form a crucial part in planning and controlling performance.
The financial accounts are an end product and depend on staff performance and commitment. This is the key to success.
20Twenty Business Growth Programme will be offering its flagship level 7 and level 4 courses on a fully-funded basis for a limited period only.
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