Aligning Your Budget with Your Strategic Vision – Creating a Strategic Budget

Is your organization’s budget truly aligned with its strategic plan?  Does your budget support your goals?

If the answer to either of these questions is “no”, then your strategic planning and budget processes may need to be rethought. 

To build a budget that supports your strategic vision, consider these key questions:

1.    Are you solving the right problem?

2.    Does your strategic plan and budget incorporate stakeholder input?

3.    Do you have clarity on what funding is needed and when it is required?

4.    Do you have the right information to make informed resource allocation decisions?

5.    Can your organization effectively respond to unexpected events?

If you answered “no” to any of these questions, it may be time to refine your budget and strategic planning processes. 

Here’s how you can integrate key characteristics of the strategic budget process into your existing approach to ensure your budget supports your strategy:

1. Define the Right Problem – Before developing your budget, ensure that your strategic plan addresses the right issues.  Don’t settle for the first challenge that comes to mind – refine and validate your problem statement to align with your organization’s long-term success.  Brainstorming can be helpful in making sure that you have identified the correct issues.

   
   

2. Gather Stakeholder Input – Engaging stakeholders early helps identify the correct challenges and opportunities. It is important to do this before you spend money or make any promises.  Collect feedback in a transparent, non-judgmental way, and clearly define decision-making roles and communication strategies.  This step should provide your organization with critical information and help to build trust between your organization and stakeholders.

   
   

3. Clarify Costs and Timelines – Once you’ve clarified key problems, goals, and strategies, develop cost estimates. A well-defined strategy leads to a budget that more accurately reflects your organization’s needs.  Building a budget that is based on an accurate plan with clear goals should clarify not only how much money you need, but when you need it.

   
   

4. Ensure Information Flow – If you’re not receiving the data you need when you need it, it could mean your strategic planning and budgeting processes are disconnected and your strategic plan is not guiding your budget estimates. Aligning these processes will help your organization to make informed budget decisions that support your strategic goals.

   
   

5.  Build Flexibility – If your organization struggles to adjust its budget and strategy in response to unexpected events, your processes may be too rigid. A more adaptive approach will allow you to pivot as needed.  On-going monitoring, evaluation, and discussions are critical in maintaining flexibility.

Transitioning to a strategic budget process does not mean overhauling your entire budget and strategic planning processes.  Instead, identifying misalignments between the budget and strategic planning process – or pinpointing gaps in the information you have – can help you make target adjustments to better align your budget with your strategic vision.

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What’s Your Take? 

What’s the biggest challenge you face in aligning your organization’s strategy with its budget? Share your thoughts in the comments below or connect with us on LinkedIn.