CHANGE A RISKY BLUE-SKY STRATEGY INTO A FISCAL VISION WORTH ITS WEIGHT IN GOLD
It is hard to be vigilant against being blindsided in a world of paradigm-shifting events if even part of your strategy process suffers from blue-sky syndrome. Strategies without a fiscal vision are not grounded in reality. Implementing back to the basics fiscal vision improvements can rapidly and inexpensively reduce strategic, financial or operational risks.
Where can you improve the emphasis from crafting impressive-sounding mission statements, core values and new initiatives with scant consideration given to the company’s real financial position?
Going deeper, how often have you seen strategic planning fail because it has no connection to reality or the company’s current conditions – or, most disheartening, no connection to management incentives and bonus plans? How many companies in year three, four and five of a five-year strategic plan just plug in the same financial assumptions articulated in an older plan? Where could your executive team better describe bottom line performance based on a review and analysis of the financial statements, budgets and financial projections?
Objectively reviewing your company’s financials helps determine whether your current strategy is working or not. Actual numbers sometimes reveal an underlying reality vastly different from how the executive branch wishes to perceive company performance. If the numbers indicate that the company is not going to reach financial and budgetary goals, no pie-in-the-sky strategy is going to help it maintain its competitive advantage, much less sustainably grow profitably. In the end, business is all about cash in the bank, valuable assets, wise investments, a balanced balance sheet, realistic budgets and financial projections – with a sound strategy supporting the bottom line.
Oct-Dec 2016 Issue