LINKING BUSINESS STRATEGIES TO BUDGETS
Author/Lecturer <ul><li>DAVID L. OSBURN </li></ul><ul><li>David is the founder and managing member of David L. Osburn & As...
LINKING STRATEGIES TO BUDGETS I.  WHAT IS A BUSINESS STRATEGY OR PLAN? A company’s strategy consists of the combination of...
<ul><li>  </li></ul><ul><li>  </li></ul>III.  HOW WELL BUDGET ALLOCATIONS ARE LINKED TO THE NEEDS OF STRATEGY CAN EITHER P...
IV.  HOW IS A STRATEGY OR BUSINESS PLAN DEVELOPED? THE FIVE TASKS OF STRATEGY MANAGEMENT   A) Developing a strategic visio...
<ul><li>V.  COMPANY ASSESSMENT </li></ul><ul><li>WHAT IS YOUR COMPANY’S VISION STATEMENT?  </li></ul><ul><li>WHAT IS YOUR ...
<ul><ul><ul><li>VI.  THE EVOLUTION OF THE COMPANY’S STRATEGIES: </li></ul></ul></ul><ul><ul><ul><li>An organization’s stra...
<ul><li>VII.  HOW DO STRATEGIES GET CRAFTED? </li></ul><ul><ul><li>The chief architect approach: The owner or CEO assumes ...
<ul><li>  VIII. HOW WOULD YOU RATE THE PRESIDENT/CEO OF </li></ul><ul><li>  YOUR COMPANY WITH STRATEGY EXECUTION? </li></u...
IX.  BUDGET (THE ANNUAL NUMBERS) Who originates the numbers within your company? Who implements the delegation of the numb...
<ul><li>X.  HOW DOES CORPORATE CULTURE IMPACT BOTH STRATEGY AND </li></ul><ul><li>BUDGET? </li></ul><ul><li>Corporate cult...
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Linking Business Strategiesto Budgets

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Linking Business Strategiesto Budgets

  1. 1. LINKING BUSINESS STRATEGIES TO BUDGETS
  2. 2. Author/Lecturer <ul><li>DAVID L. OSBURN </li></ul><ul><li>David is the founder and managing member of David L. Osburn & Associates LLC, a Las Vegas-based business training and contract CFO firm that provides seminar/keynote speeches for various groups including CPAs, bankers, attorneys, credit union employees, credit managers, trade groups, and businessowners. He also serves as a contract CFO for a large multi-state construction company, co-manages a bank educational program with the University of Nevada Las Vegas, and is a board member of North Star Business Services, a commercial lending company (commercial real estate and equipment financing). </li></ul><ul><li>His extensive professional background encompasses over 25 years in banking, finance, and marketing. His bank commercial lending credentials include comprehensive loan underwriting, management, customer development, and loan workout experience. </li></ul><ul><li>In addition, David is an Adjunct Professor for Regis University, an accredited MBA program and the College of Southern Nevada, a community college. He has taught college courses for over 24 years, covering Finance, Accounting, Economics, Marketing, Banking, Business Law, and Management. </li></ul><ul><li>He earned an MBA in Finance/Marketing from Utah State University and a BS in Finance from Brigham Young University. He is also a graduate of the University of Oklahoma National Commercial Lending School. </li></ul><ul><li>David L. Osburn & Associates, LLC </li></ul><ul><li>A Business Training & Contract CFO Firm </li></ul><ul><li>David L. Osburn, MBA </li></ul><ul><li>Managing Member </li></ul><ul><li>7521 Enchanted Hills Ct. </li></ul><ul><li>Las Vegas, Nevada 89129 </li></ul><ul><li>Direct: (702) 655-1187 </li></ul><ul><li>Fax: (702) 382-2298 </li></ul><ul><li>E-Mail: [email_address] </li></ul><ul><li>Web: dlosburn.com </li></ul>
  3. 3. LINKING STRATEGIES TO BUDGETS I. WHAT IS A BUSINESS STRATEGY OR PLAN? A company’s strategy consists of the combination of competitive moves and business approaches that managers employ to please customers, compete successfully, and achieve organizational objectives (Long Range) II. WHAT IS A BUDGET? A budget is an allocation of the firm’s funds determined by management usually on an annual basis (Short Range)
  4. 4. <ul><li> </li></ul><ul><li> </li></ul>III. HOW WELL BUDGET ALLOCATIONS ARE LINKED TO THE NEEDS OF STRATEGY CAN EITHER PROMOTE OR IMPEDE THE STRATEGY IMPLEMENTATION PROCESS EX. The firm’s annual partner’s meeting What if the strategy for the future year and beyond is clearly outlined but when the annual “goals” (which are the mirror reflection of the annual budget) are dished out to each department head, it is very clear that a large disparity exists between the strategy and the goals?
  5. 5. IV. HOW IS A STRATEGY OR BUSINESS PLAN DEVELOPED? THE FIVE TASKS OF STRATEGY MANAGEMENT A) Developing a strategic vision and business mission B) Setting objectives C) Crafting a strategy to achieve the objectives D) Implementing and executing the strategy E) Evaluating performance, monitoring new developments, and initiating corrective adjustments
  6. 6. <ul><li>V. COMPANY ASSESSMENT </li></ul><ul><li>WHAT IS YOUR COMPANY’S VISION STATEMENT? </li></ul><ul><li>WHAT IS YOUR COMPANY’S MISSION STATEMENT? </li></ul><ul><li>WHAT IS YOUR COMPANY’S OVERALL OBJECTIVE? </li></ul><ul><li>WHAT IS YOUR COMPANY’S STRATEGY? </li></ul><ul><li>HOW WILL YOUR COMPANY IMPLEMENT THE STRATEGY? </li></ul><ul><li>HOW WILL YOU EVALUATE AND MAKE CORRECTIVE ADJUSTMENTS? </li></ul>
  7. 7. <ul><ul><ul><li>VI. THE EVOLUTION OF THE COMPANY’S STRATEGIES: </li></ul></ul></ul><ul><ul><ul><li>An organization’s strategy reforms over time as the number of changes and adaptations begin to mount. </li></ul></ul></ul><ul><ul><ul><li>Strategy making is an on-going process, not a one-time event. </li></ul></ul></ul><ul><ul><ul><li>Strategic change is needed in order to improve on how the company is competing today and the need for actions to prepare for tomorrow’s markets and competitive conditions. </li></ul></ul></ul>
  8. 8. <ul><li>VII. HOW DO STRATEGIES GET CRAFTED? </li></ul><ul><ul><li>The chief architect approach: The owner or CEO assumes the role of chief strategist. </li></ul></ul><ul><ul><li>Delegation Approach: The manager in charge delegates big chunks of the strategy-making task to trusted subordinates, down-the-line managers in charge, or to a high-level task force. </li></ul></ul><ul><ul><li>Team Approach: The manager enlists the assistance and advice of key peers and subordinates in hammering out a consensus strategy. </li></ul></ul><ul><ul><li>Corporate Intrapreneur Approach: Top management encourages individuals and teams to develop and champion proposals for new product lines and new business ventures. </li></ul></ul>
  9. 9. <ul><li> VIII. HOW WOULD YOU RATE THE PRESIDENT/CEO OF </li></ul><ul><li> YOUR COMPANY WITH STRATEGY EXECUTION? </li></ul><ul><li> SCALE: </li></ul><ul><li> 5 4 3 2 1 </li></ul><ul><li> </li></ul><ul><li> BEST WORST </li></ul><ul><li> HOW WOULD YOU RATE THE DIRECTORS OF YOUR COMPANY IN “OVERSEEING” THE STRATEGY </li></ul><ul><li>MANAGEMENT PROCESS? </li></ul><ul><ul><li> SCALE: </li></ul></ul><ul><ul><ul><li> 5 4 3 2 1 </li></ul></ul></ul><ul><li> </li></ul><ul><li> BEST WORST </li></ul>
  10. 10. IX. BUDGET (THE ANNUAL NUMBERS) Who originates the numbers within your company? Who implements the delegation of the numbers? How are the budget numbers actually delegated? Is there a coordinated effort within the firm to match the annual budget numbers with the long- term strategy?
  11. 11. <ul><li>X. HOW DOES CORPORATE CULTURE IMPACT BOTH STRATEGY AND </li></ul><ul><li>BUDGET? </li></ul><ul><li>Corporate culture: A company’s values, beliefs, business principles, </li></ul><ul><li>traditions, ways of operating, and internal work environment. </li></ul><ul><li>Corporate culture will change due to: </li></ul><ul><ul><li>Internal crises (such as a merger, a recession, or a “flood”) </li></ul></ul><ul><ul><li>Revolutionary technologies </li></ul></ul><ul><ul><li>New challengers in the market </li></ul></ul><ul><ul><li>A dominant CEO </li></ul></ul><ul><li>Changes in corporate cultures will impact both strategy and budgets. </li></ul><ul><li>Strategy and budgets are often a mirror reflection of corporate culture. </li></ul>

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