I want to ask you a question. In the past five years, how many times have you missed your budgeted top line? If your answer is none, then this article is not for you. I will have one to share that addresses you soon, so be ready. If you’ve missed once, I’ll leave it to your discretion as to whether to continue. However, if you’ve missed it two or more times, I’ve got a follow-up question to ask.
In the past five years, how many times have you missed your budgeted top line?
What’s standing in your way? There’s got to be something. I’ve asked this question many times, and I’m continuously surprised by the various answers I get in response. Almost always some external factor is blamed. The market has slowed, our retailers have consolidated, buyers have changed, the economy is bad. You get the point.
I don’t understand. When we map out our budgets, it doesn’t matter if it’s the CEO going to the board, or the Sales Leader going to the CEO, our natural tendency is to be conservative. Come on, it’s just us here. We all try to sandbag as much as we can get away with. You know the adage, under promise and over deliver.
We all try to sandbag as much as we can get away with.
Even when we can’t truly sandbag, we do the math. We work on our projections. We look at last year’s sales, our products or services, and our strategic plan. We use experts and our own expertise to gauge the macro and micro trends in the market. From that foundation, we build a budget that is reasonable, achievable. So, If you’ve missed your budget two or more times in the past five years, I’ll ask the question again. What’s standing in your way?
I’ll share what I’ve found. In my experience, and I’ve missed more than a few budgeted top lines, there are typically three things lacking that are intertwined: clarity, focus, and accountability. To accept that is somewhat of a bitter pill to swallow. But, medicine doesn’t always taste good going down, yet it sure can help cure you.
In my experience, and I’ve missed more than a few budgeted top lines, there are typically three things lacking that are intertwined: clarity, focus, and accountability.
Wander around, talk with your team and employees. Especially those that are customer facing. Find out if everyone understands in which high-value activities he or she should be involved. See if they can connect their role and its impact on the overall strategy of the organization. Ask them if they can tell you what makes the company and its products different from those of the competitors. Learn if they truly grasp the company’s purpose, vision, values and desired outcomes.
Activity is often confused with value. We act as squirrels in search of our next nut. We zig and zag, waste a lot of energy, and wind up right back where we started. Activity is not the currency of success. Being busy doesn’t guarantee that you’re effective. Focus is how you channel effort and convert that energy into results. It requires guardrails. On one side there is clarity, on the other, accountability.
In this case, I am not just referring to the traditional superior to subordinate performance review type of accountability. That is the old carrot and stick model, one that I feel is outdated. Instead, I am referring to a true culture of accountability, where individuals hold themselves to a standard of excellence and in turn, hold others to those same standards. It is where everyone operates from a stakeholder’s mentality and friends don’t let friends slack. A culture of accountability is what helps foster focus and delivers results.
What I am trying to encourage you to do, is not blame the external forces for your budget miss. Rather, use it as a warning sign that there might be icebergs ahead. As the leader, you need to ensure that your organization has the clarity, focus, and accountability needed to deliver the results you expect. You won’t always hit your numbers, and it’s okay to dare to be great. But, if you miss them routinely, I’d start by looking in the mirror.
If you liked this article, I’d love to send you more just like it. Click here and leave your email and I’ll make sure future articles are sent right to your inbox.
Elliot Begoun is the Principal of The Intertwine Group. His articles appear in publications such as the Huffington Post, SmartBrief, and Business2Community. He serves as a consultant and thinking partner helping emerging food and beverage brands grow.