The Hammer and Nail: Every Budget Needs a Plan, Just as Every Plan Needs a Budget
By Carl McKenzie
It isn’t a coincidence that most industry conferences are scheduled around the same time that business leaders are working on budgets and planning for the upcoming year. Both come every fourth quarter with the regularity of sunrise. Both also take a lot of time and include a lot of people, for the sake of unique values and perspectives. While one is clearly more fun than the other, both have purpose. Together, they set the machine in motion for an upcoming year.
I tell my wife that I go to trade shows to do late night research for the hard work of budgeting and planning. Together, they’re hard work, but a budget without a plan is like a hammer without a nail. If you use the hammer alone, not only is it impossible to build, but you’ll eventually break everything. Add the nail and you can start building.
It is true that the hammer never goes out of style and a budget helps to hammer out results. But a plan is what builds up your organization, giving you the confidence of knowing how your company will nail down results.
Planning to Lead
Are you reading this and wondering if you are putting your budget to improper use? If so, you’re missing a huge leadership opportunity by not combining budget development with planning.
The process of planning is an opportunity to involve your people in the business more deeply, engaging their hearts and minds in what you need to accomplish together. Being in on the plan gives people a sense of ownership and commitment that is hard to replicate. It draws teams together and can help galvanize their efforts. It establishes priority that carries through to individual actions and drives focus. In the process of creating and deploying a plan, you get the chance to connect success, satisfaction and rewards in ways that will change jobs into careers. It’s work, but I can assure you—you will feel benefits beyond what I am describing.
A plan also serves as a call to action. It becomes a common language—company wide—and a way to talk about the “what” and the “why” of any business. Together, an annual budget and overall business plan set the machine in motion for an upcoming year. It can help to wrap order around the chaos that most of us deal with daily and becomes a source of direction, purpose and motivation. It can be the thing that gets people out of bed in the morning.
A good plan offers perspective when the work is just plain hard, and when change creates uncertainty and discomfort. As a call to action, it becomes home base. It can be repeated and leaned on at all levels of an organization, providing consistency of message, helping employees to feel a real sense of connection to something bigger than themselves. You will be surprised when your people thank you and tell you how much they needed to know your company’s plan.
This surely reads as though I don’t believe in budgets. To be clear: I do. Budgets are necessary. They predict a result and then give us a means for measuring progress. That’s important, but what I really believe is that actions drive results. When your organization defines, owns and communicates the required actions, plans take on a life of their own. That is how you combine the hammer with the nail.
Carl McKenzie is chief operating officer for Specialty Building Products and immediate past chairperson for World Millwork Alliance.
carlmckenzie@sbp.com
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