What's More Important the Plan or the Process?

Susan C. Hammond

“Plans are nothing; planning is everything.“  Dwight Eisenhower

Very often the process of planning is discounted because the plan goals are not attained.  If you find you frequently don’t hit the plan goals consider it may be the process that’s impeding your success.

Here are seven questions to consider for improving both the planning process and the intended results:

1. Do you plan from the top-down or the bottom-up? Failure to involve the front-line managers and staff, the people responsible for the execution of the plan, can doom the plan to failure.  Who knows better the whims of the constituents?
2. Can the non-financial types use the format accounting provides? If you find you receive a lot of supporting schedules for otherwise straight forward categories I’d suggest the managers don’t find the format useful.  When I served as the CFO of a museum I ran a refresher each spring as the budgeting process started.  For those having a lot of problems I’d sit when them from time to time as they completed their budget.  I never actually did their budget but I did assist them.
3. Is the plan tied to individual and departmental strategic objectives? How the numbers and goals relate must be crystal clear so that the lowest ranked employee can articulate how her activities will or won’t help attain the projected income target.
4. Does every staff person, not just management, understand the key metrics of your organization? At the museum we had a key metric we referred to as “feet through the door” which represented attendance at new exhibitions.  Orchestras have one called “butts in the seats” for how many people are in the audience for any given performance. Uneducated employees will cost you in productivity, efficiency and strategy everyday.  Consider some form of open book management.
5. Do you document all the assumptions used to develop the plan? If not it will seem you “pulled them out of thin air” as they say.  Documentation can be in the form of bullet points, long narratives and additional worksheets.
6. Do you prepare different scenarios so the organization is prepared when results are different? Understand that nothing ever goes as budgeted and that most budgets are only good for the first three months.
7. Do you understand why the results are better than expected? So often analysis is done only when a category is under budget, which is important.  If you don’t understand why a revenue category is over budget how can you possibly repeat whatever caused it?

All these questions are meant to improve the process used to budget and plan. It is through the preparing of the numbers that we learn the most valuable information not from the numbers themselves.  If you need to get your staff up to speed on using financial information to plan better consider an in-house training, something like Finance & Accounting for Non-Financial Staff.  Most CPAs and CFOs can provide this necessary training.  Or contact me.

Susan C. Hammond,principal of scHammond Advisors, consults with nonprofits on board governance, strategic planning, improving financial intelligence, and the formation of advisory boards or councils.  She is an advisor, coach, consultant and author.  Susan recently published the Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board.

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