Our new context makes the familiar task of budgeting both more challenging and more imperative. And it’s worrying the CEOs and executives I work with.
“We’re bushwhacking our way through 2020,” as one said. “I’m struggling with how to make sense of this in a meaningful way for 2021.”
It’s hard enough to project financial and operating results for the remainder of 2020, let alone setting objectives for 2021. Further, our planning context is in constant flux. Medical and public health professionals warn of the likelihood of additional surges in virus infections. Broader systems (like schools, transportation, government loans and stimulus) may not be available to support our businesses and staff going forward. Financial and employment worries erode consumer confidence. With few, if any, aspects of these within the executive team’s control, how do they set a meaningful budget?
No single budget will capture all of the uncertainties or possibilities any business will face through 2021. Instead, CEOs need to understand potential impacts to their financial and operating results under different conditions. They need multiple budgets—or a primary budget that also illustrates the critical decisions and adjustments required to adapt quickly as things change.
Your budget is (or should be) a strategic tool. It connects your resource allocation to the strategic priorities you’ve set. As CEOs navigate through the systemic impacts of this pandemic, many are narrowing their focus to the things that matter most. (See my related articles here and here.) Of course, this focus also guides budgeting. Still, with so much uncertainty, executive teams can’t rely on one picture of the future.
Scenario thinking, visioning, exploratory learning: each of these approaches can help leaders to create pictures of the business’ future. Look across the varied pictures: What are the key levers for your business? Then consider your budget: How might you manipulate the key levers – investing or cutting resources – and by how much? Answers to those questions help you to see beyond the uncertainty. Then, when you link strategic insights to specific budgetary actions, you also highlight the implications of your decisions on operations.
Executive teams need varied pictures of the future. They also need budgets that help them to anticipate how they might reallocate resources rapidly and effectively as things change. In this environment, a single budget just won’t cut it for 2021.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
