1 / 6

Linking the Budget to Strategy

Linking the Budget to Strategy. Implementation of a strategy requires Enough resources to support the strategy Screening of requests for new capital projects and bigger operating budgets Shifting resources to support new strategy priorities - Downsizing some areas and upsizing other areas

japheth
Download Presentation

Linking the Budget to Strategy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Linking the Budget to Strategy • Implementation of a strategy requires • Enough resources to support the strategy • Screening of requests for new capital projects and bigger operating budgets • Shifting resources to support new strategy priorities - Downsizing some areas and upsizing other areas - Eliminating activities that are no longer needed • How well budget allocations are linked to the needs of a strategy • can either promote or impede the implementation process.

  2. Implementing Best Practices & Continuous Improvement • Implementing a strategy involves adopting “best practices” • Best practices means: • Benchmarking is an integral part of a successfully implemented strategy • Continuous improvement programs • Total quality management - TQM

  3. Instituting Best Practices & Continuous Improvement • Quality improvement programs are linked to • Defect-free manufacture • Superior product quality • Superior customer service • Total customer satisfaction Identifying & implementing best practices is a journey, not a destination; it’s an exercise in doing things in a world-class way.

  4. Formal Reporting of Strategy-Critical Information • Accurate & timely information is essential to guide action • Prompt feedback on implementation initiatives are needed BEFORE actions are fully completed • Monitoring early implementation actions serves two purposes • Quick detection of the need to adjust the strategy or its implementation • Making sure things are moving in the planned direction • Critical success variables must be track as needed

  5. Formal Reporting of Strategy-Critical Information • Information systems should cover • Customer data • Operations data • Employee data • Financial data Accurate information allows a strategy to be monitored and corrective action to be taken promptly

  6. Commitment to Chosen Strategy • Implementing rewards & incentives inducing employees to make the strategy work • The reward structure must motivate people to do the very things it takes to mjake the strategy work successfully • Requiring results, not intentions • Keys to implementing pay-for-performance programs • Make performance targets the basis for structuring the incentive system • Ensure performance targets are clearly defined and every person/group is accountable for achieving them • Be fair and impartial in comparing actual performance against targets • Avoid rewarding non-performers • Explore reasons for deviations (“poor” individual performance or circumstances beyond the individual’s control)

More Related