I’m sure there are a good few of you who remember, fondly or otherwise, that 1980s action adventure TV series, The A-Team, and team leader ‘Hannibal’ Smith, who reminded us all too frequently that he loved it when a plan came together…
Old Hannibal knew a thing or two about planning – and then working the plan. He knew that success was seldom a matter of chance and almost always came down to careful and methodical preparation.
Similarly, successful boards appreciate that astute planning is the bedrock of their organisations’ success, so you can understand why it baffles me that there are still so many boards out there that continue to attend to planning for the new financial year in a manner that can only be described as piecemeal.
They’ll invariable leave things too late, they’ll run out of time, they won’t have all the information at their disposal and they’ll resort to approving the budget for the new year based on what’s transpired during the year drawing to a close, albeit with a little tinkering.
What makes it all the more baffling is that the correct way of going about it is hardly rocket science. It is all about getting the sequence right – and then spending the necessary time and effort – on the planning so that the annual business plan for the new financial year is based on reality…and works!
In savvy and successful boardrooms across the country, members are at it right now, using February as the launch month. They’re starting to look at financial plans for the new financial year that kicks off on 1 July. They’re using this time to consider the important actions for the next 12 months.
They will then use the February board meeting to review the current strategic plan and ask questions about the future vision. Is it still valid or has the world changed? Are their strategic goals still correct?
Often they will be, so there’s not too much to change. But it is always good to start with a review of the current plan.
Once agreed, they will then have clear strategic goals and the KPIs needed to measure outcomes.
It’s over to management, then, to spend the next few months using this version to craft the business plan for the next 12 months, knowing that their short-term plan connects with the longer term strategic plan, that it’s a 12 month step towards the vision, that the organisation is going forward in synch.
When February is the starting point, the April board meeting can then be used to consider management’s annual plan, provide further input and ultimately approve it.
Finally, during May and June, management can draw up the budget based on the business plan, the budget is then tabled at the June board meeting, it is discussed, debated and approved and ready for implementation from 1 July.
As I said, it has little to do with rocket science, much to do with sequence.
Until next time,