planning & budgeting

Always excited to have my opinion requested on LinkedIn

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So, in short, Yes. What gets measured gets done.

Allow me to make three observations. First:

“The goal of a for-profit company is to maximize profitability.”

Not to split hairs, but I will. {grin}

The primary goal for a for-profit business

“To make money now, and to make even more money in the future.”

Second, the short answer is almost the same: “Your mileage may vary.” But let’s talk about where they most likely will align. Consider this age-old axiom for leaders:

“Be thou Diligent to know the state of thy flocks…”
—King Solomon

The best book for that? Debra Smith’s The Measurement Nightmare: How the Theory of Constraints Can Resolve Conflicting Strategies, Policies, and Measures

If you don’t know, Cash Basis Accounting is the preferred “managerial accounting” approach for business unit managers. Why? Read the book. Then, align your budgeting tools with this insight. Make sense?

Third, “Planning & Budgeting” is outdated as a “single” concept. These two functions actually need to be done as stand-alone functions which then get integrated into the overall business Operations Plan for FY 202X. This first requires a very thorough Strategic Plan for FY 202X based on the “The Goal Tree” as Dettmer now calls the SIO Map [Strategic Immediate Objectives Map circa 2003 from his book, Strategic Navigation].

So, the bottom line: Every business needs to use the same framework, but individual components mary vary by a significant factor. Reach out to me for your free thirty minutes of insights into Goldratt’s Theory of Constraints (TOC) [aka Constraints Management, my preferred term] and The Logical Thinking Process to Double Sales in just 90 days.

Phone or Text PLANNING to 614.412.2001

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P.S. Thorsteinn Siglaugsson on LinkedIn:
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