I know it is tricky as a busy business leader or finance professional
to juggle everything we must do. If you are anything like me, the lines of what
is home and what is work have become even more blurred due to COVID-19. And yet
we all want to make changes to improve our businesses, careers, health,
nutrition etc. Don’t we?
So habitually we set business budgets and start January with
a flurry of New Year Resolutions. We
desperately hope that we’ll be able to maintain control long enough to make
some progress before our budgets get overtaken by external events and our resolution
willpower fails.
Last year, in a survey of nearly 200 accountants, I discovered
that before COVID, 90% of annual budgets were irrelevant within half a year and
nearly half were out of date before a month of the new period had elapsed.
And in terms of ‘New Year’ Resolutions, a simple Google
search will reveal many credible studies indicating a very poor success rate
for pledges to exercise more, eat more healthily and quit smoking.
So, as the UK is entering a further COVID-19 lockdown and we’re
all facing a more uncertain 2021, isn’t the budget cycle even more futile this
year? Is there any point in making specific resolutions for New Year?
I am therefore not relying
upon annual budgeting, or changing my life through new year resolutions.
But that doesn’t mean I’m giving up either!
So what’s the alternative?
In 2020 I changed the way I do things to set goals and to
organise my priorities and tasks. I pivoted
and moved my InfoSuperstar consultancy work online. But I also combined all the
time and task management for my professional and personal life into one system. And I gave up depending upon annual budgets*.
(*accountants may be having an emotional meltdown at this
point)
The results have been transformational for my ability to
keep focus, make decisions, be productive and minimise the professional overwhelm.
I’m not saying that all is “motherhood and apple pie”. 2020 was
a tough year and my mental health went through a rollercoaster ride.
But I can look back and reflect positively on the results I
achieved each quarter.
Understanding
“Why?” before “How?”
Fully explaining how
I did this will have to wait for
next week’s blog, although I’ve written a little at the end of this section.
First we must understand “why” we set New Year resolutions and annual
budgets, since we’re in the season of new year resolutions, and many organisations
will either be in the first month of a new period or in the process of setting
budgets for an upcoming new period.
The Christmas season is often when we have time to pause and
reflect. And to eat and drink to excess
while spending time with family… We ponder the year that has gone and, when rested, gather
the determination to change in the year that follows.
New Year resolutions are a natural and good process.
Similarly, most businesses engineer and annual process to
take time out to plan for the future and habitually make financial budget plans
to last until the next planning cycle.
Creating a forward forecast is a natural and good process.
Where is all goes wrong is in the delivery. Both as individuals and organisations, we get
busy. External events (both good and
bad) change both our priorities and our ability to deliver.
Essentially, we should never
expect budgets and resolutions to last for a full year.
Instead, to make meaningful progress we need two things:
1.A clear sense of missional purpose – an articulation
of the answer to “Why?” we are doing what we do.
Just like a sailor will keep a
sense of direction based upon a compass bearing, we need to understand where
our destination lies in case the immediate storm changes our position or
short-term direction.
2.Shorter planning cycles
We can probably only predict our
ability to manage action or have foreseeable circumstance for a maximum of
three months.
And we will have to be responsive
on at least a weekly basis to determine our immediate action responses.
The problem of failed resolutions
and obsolete budgets is largely that insufficient time and thought is put into
reminding ourselves of purpose and reacting/pivoting our plans when we realise
our assumptions of circumstance or our ability to deliver were wrong.
How I’ve
implemented this
To try to implement his myself, in 2019 I created a simple
statement of what I wanted to be at the end of 2021. It includes all aspects of
my life, not just the business work I do with InfoSuperstar.
Each quarter, I define (under objective headings) Key
Results that I want to see on the journey to fulfil the end of 2021 vision.
For example, this Quarter (Jan-Mar 2021) here’s some of what
I have planned for InfoSuperstar (redacted for financial targets), within the
context of my overall personal mission:
What can
you do now?
·Can you write down a concise (100 word) summary
of your own missional purpose?
·Can you turn your New Year Resolutions into
short-term “Key Results”?
·Can you Budget your time to make sure you set aside
time to succeed in the most important areas to you?
More on how to implement this will be coming next week!
As for organisational budgets, And, as you can see from the
above Key Results, I plan to get my “Post-Pandemic Planning Paradigm” Course
online this quarter! I’m cooking up a separate
course to help finance professionals create flexible forecasting and budgets
without “death by a thousand spreadsheet cell formulae”.
As always, please feel free to contact me if you have
questions or comments.
Stay sane, stay focused, stay safe!
Andy
