Strategy before Budget; not the other way around.

A misconception I see play out far too often: that the budget sets the strategy. It doesn’t. It resources it.

And when a business gets that order backwards, everything downstream bends to fit the spreadsheet.

So here’s the order that works:

1. Strategy — the vision (what we want the future to look like), purpose (why we exist and the role the business plays), values (how we behave and make decisions), and the initiatives and their outcome that get us there. The three to five year plan

2.Risk management — wrapped around the strategy, identifying what could go wrong including the inherent strategic risk, and putting in controls that enable the business rather than burden it

3. Culture — because culture eats strategy for breakfast, operational excellence for lunch, and everything in between

4. Operational plan — turns the three to five year strategy into year one. What we will do, by when, and who owns it

5. Financial budget — built off the operational plan (year one of the strategi plan), outlining the resources required to bring it to life

6. Reporting — financial results plus leading and lagging indicators, so you know early whether you’re on track or need to correct course

Get the order wrong and the whole thing starts to strain. Weak or missing foundations are the most common thing we see, and fortunately the most fixable.

I've pulled together these six important layers into a Framework that helps show this. Download your free copy below.