Ready for 2013? – Lean Planning & Budgeting

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Ready for 2013? – Lean Planning & Budgeting: Part 1

It’s almost 2013. Some companies are already in the middle of the 2013 “preparation process” while others still have the task waiting somewhere on their to-do list.

Will it be a “same procedure as last year” type exercise? Or are you going to do it differently this time? Do you want your 2013 objectives to be very different from your 2012 achievements?

In a series of blog posts I will provide some best-practice hints as to how the 2013 “project” can be prepared in Q4 without stealing all the time you need for closing the year.

Ambition & Mission: #1 worldwide!

OK, these may not be best-practice hints for everybody. The hints are meant for software-driven businesses with ambitions of becoming the global leader in their field. This may not happen in 2013. But if 2013 is not a step on the path to global market leadership, the probability for “Mission Accomplished” will be smaller next year. Now is the time to get started on the journey.

If you have already set your mind on a global leadership position, you most likely also have substantial growth rates for 2013 in mind.  What is your 2013 ambition? 25% – 50% – 75% – 100% – more? What should grow? Profit, revenue, market share, gross margin, cash on hand, number of customers, number of resellers, return on assets, valuation, or staff?

The objective of the series of blog posts under the main headline “Ready for 2013?” is to outline a 2013 “preparation process” where you end up having a plan and a budget that is a stepping stone to a position as a the global market leader and where the stakeholders are 100% aligned and committed to execute the plan and deliver the numbers. 

The 2013 preparation process

I am deliberately using the term “preparation process” to avoid the terms “strategy, plan, budget, KPI’s”, etc. at this stage. We will get to that.

Preparing for the next fiscal year is an execise undertaken by most companies.  However, if you are on the path to global leadership one issue is more crucial than any other:

Will all your stakeholders be executing according to the final 2013 plan?

Achieving maximum thrust with the resources we have available requires all stakeholders pulling and pushing in the same direction.  How can you orchestrate your 2013 preparation process and ensure that as of January 1st 2013 all forces are working towards the same objectives = your objectives?

Alignment & Identification

Achieving alignment and identification for your 2013 plan is crucial for gaining maximum (revenue, gross margin, market share, profit) impact for each EUR/USD spend on the cost side.

Alignment is the assurance that all stakeholders have a common interpretation of the plan. Yes, this is the plan.

Identification is the buy-in from each of the stakeholders to the plan.  Yes, this is my plan!

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Alignment test

If you would like to test the degree of alignment in your management team, I can recommend the free X-Ray currently offered by TBK Consult. Head over to the TBK Consult web site and fill in the form. It takes less thank 10 minutes to complete the form and you will learn a lot about your management team. If you want to see a sample of the report generated by the free X-Ray, click here: X-Ray Alignment Report

PS: A note on lines of businesses and geographies

Are you running several lines of businesses?  If you do, you must replicate the planning process for each line of business. Each line of business needs its own mission, vision, strategy, customer value proposition, value chain, ideal customer profile, Go-To-Market approach, execution team, etc.

Are you operating in several geographies?  If you are, you must replicate the planning process for each geography. Each geography needs its own P&L and execution team.

In the situations described above you need a coordination team to set the directions, oversee the process, review the outcome and consolidate the final plans.

This series of blog posts on planning for 2013 are primarily addressing the individual business unit.  We will conclude the series with some hints on how to manage several business units and geographies.

Other posts in this “Ready for 2013? –  Lean Planning & Budgeting” series:

The objective of the blog posts is to outline a 2013 “preparation process” where you end up having a plan and a budget, which is a stepping stone to a position as a the global market leader in the future and where the stakeholders are 100% aligned and committed to execute the plan and deliver the numbers for 2013.

#1: Perform an Alignment Check before Planning and Budgeting
#2: Get the Key People Involved up Front
#3: How to do an Alignment and Identification Check
#4: The Revenue Challenge
#5: Planning Fundamentals
#6: Mitigating risk and exploiting opportunity
#7: Mission/Vision and the 3-5 Year Perspective
#8: What Comes First, the Plan or the Budget?
#9: Defining Key Performance Indicators for Plan and Budget Follow-up
#10: The People on the Bus

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