No strategy will be executed without proper funding. While budgets and financial targets are important, sometimes they take priority above strategic objectives. This mistake can be catastrophic. If your main strategic initiatives aren't being executed because they don't have the resources, you need to reevaluate your financial priorities and invest to get the results you want.
- No strategy will be executed without proper funding while budgets and financial targets are important, sometimes they take priority above your strategic objective. That mistake can be catastrophic. If your main strategic initiatives aren't being executed because they don't have the required resources, you need to reevaluate your financial priorities and invest to get the results you want. Think about retirement planning. If your strategic goal is for you to retire at the age of 65, if you're not investing an appropriate amount now, and instead you're spending on other endeavors, you won't reach that strategic goal of retiring at that age.
Your business runs the same way. I worked with one organization that did this really well. They were investing for the long term. They knew what their strategy was and where they needed to put the money. They had some small businesses in growing markets but those businesses weren't profitable in the near term. They still fully founded those businesses even though they weren't getting the near term profits. The reason they funded them was they knew, down the road, five years, six years out, those businesses were a huge component of their overall strategy.
They made sure they were fully funded now so they could achieve their strategic objectives. Some watch outs that you may be demonstrating this underfunding behavior, are first, your budgets are not reflective of future growth. Strategic initiatives may be delayed, because you don't have funding, and a third indicator is, you may lack a separate investment pool for strategic initiatives. Ways that you can fix these issues, are first, creating a separate funding pool.
Set aside money that's just for strategic initiatives. Next, fund strategic projects fully, before allocating funds to other projects. And last make sure, in your budgeting process you're calling out the major projects that you want to pursue. Making sure your projects are appropriately funded is a huge driver of you achieving your strategic objectives.
- Assessing the market
- Reacting to customer behavior changes
- Dealing with competitive actions
- Adjusting to technology changes
- Managing your prioritization process
- Making tough choices
- Ensuring that you're working with the right talent
- Aligning compensation and incentives
- Linking strategy to execution