Budgets Control Companies
How do those executive types running a business get some level of control over the work being done in a corporation?
You’ve seen all those news stories about executives being parachuted in to come and save the day for the company, right? But how do they do it?
In my Pimp Opinion, there are two ways. The first one is Budgets.
Every business defines profit and loss and that happens through revenue and costs. Some effort is made on the revenue side, of course, through products and services. But getting control is a lot harder on the revenue side because the risk and fickleness of the customer.
But the cost side is relatively easy to get control over. It’s done through budgets. There are many opportunities here:
- If you don’t like the program as an incoming executive, cut the budget for the program.
- If you don’t want to add people, deny the job requisitions and cut the personnel budgets.
- If you want to get managers to be creative, cut the budget across the board.
- If you want everyone to know you’re serious about this, then review the budget numbers monthly with your direct reports. In detail.
You see, at the end of the day, budgets are really stories about what is being done in the business. It’s not just numbers, but what the numbers represent. It’s not $10 million. It’s implementing a new program that will reduce overall cycle time by 30% and the payoff compared to the $10 million is $30 million.
If you can’t tell your stories through your budget, you won’t be able to defend your actions in business. And if you want to get control of a business quickly, the first step is through defining the budgets.
How else can you get control of a business? I’ll have step two tomorrow.
Tags: Creativity, Meeting magic, Strategy, Survival SkillsRelated Stories
POSTED IN: Creativity, Meeting magic, Strategy, Survival Skills
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