If something necessary for strategy isn’t in the budget and/or plan, you won’t be allowed to spend against it. Meanwhile, the budget will direct spending to lots of other potentially useless stuff.
Integrating Strategy into Plans & Budgets
Strategy needs to be integrated proactively into plans and budgets or what is contemplated in the strategy is unlikely to happen at all. The integration starts with making two lists: strategic choices and operating imperatives.
Start with Strategic Choices
Then Integrate Operating Imperatives
The operating imperatives are the elements of your strategy for which you are not trying to be unique. They must be in place for your strategy to succeed but having them in place won’t give you an advantage.
Sausage Making
The key is to refuse to abandon the fundamental requirements of the strategy. If you can’t pay for the requirements of the strategy, it isn’t a viable strategy. It is a fantasy.
Sadly, building a terminally under-resourced strategy is often more wasteful than just sticking to the current strategy and producing its expected mediocre results.
ouch!
Practitioner Insights
Translating your strategy into budget implications is tough love, not hate or disrespect.
Just don’t let budgeting and planning drive strategy or substitute for strategy. Planning and budgeting aren’t a substitute for strategy; they are complements. Plus, strategy must drive planning and budgeting — not the other way around. It is tricky sausage making to toggle back and forth until you have a financially viable winning strategy. Be principled but patient.