Plansmith Blog

Go Beyond Just Budgeting: Build A Playbook & Control Your Results

Posted by Craig Hartman on 9/30/21 1:38 PM

Are you really planning, or are you just budgeting?

By this I mean, are you just filling out the numbers on a spreadsheet by trending? It is gratifying when all the numbers come together in a neat package showing expected growth and earnings for next year. Along the way there were probably many contributors who verbally expressed their goals and plans for the year. Then, once the budget is done, it gets presented to and accepted by the board. As each month passes, comparisons are made of the budget “predictions” to reality. Variances from “budget” are explained, and business continues. In essence, that’s budgeting.

Ask yourself these questions to tell if you’re planning or just budgeting:
  • How often are comparisons made between proposed actions and the real outcomes?
  • How are the missed deadlines or unfinished campaigns dealt with?
  • Where do you maintain the description and timetables that allow tracking of the action plans?

There is a lot more to planning than simply preparing a budget, or budgeting. It’s vital that responsibilities are assigned, timetables are set, and anticipated results are documented. Execution of the plan is everything, and yet the “execution plans” are seldom – if ever – spelled out and tracked.

I don’t mean the budget predictions; I mean the little steps that lead to the results. We call these initiatives. For example, let’s say your goal/objective was to generate leads for a new loan program. Next, you’d answer these three questions:

  • Who is responsible?
  • What are the steps needed to complete the promotion?
  • How many leads do you expect?

Once the plan is in place and being executed, leads will convert to opportunities, and opportunities will convert to new loan business. This is real planning. Your budget shows the desired results, i.e. “we will grow loans by 5%,” but what supports these expected results? You need a place to document the planned actions, specify who is responsible, assign a timeframe, and detail the outcome expected. This document is called a Playbook.

On a monthly basis, the budget is compared to actual as a variance. But actions steps must be reviewed and discussed regularly to stay on course. If the action timetable falls behind schedule, then the planning team/committee can address the problem immediately, not simply when the goal is not met.

We all know that planned actions don’t turn out as expected. As this happens, adjustments can be made to the initiative required to make it happen. For example, maybe the leads generated by the marketing plan for the new loan product are falling short. You refine the plan and relaunch to test another approach. If you’re not tracking your initiatives regularly, then you’ll probably miss opportunities or pitfalls that can significantly alter your results. A playbook simply allows you to control the outcome. Rather than predicting a result and waiting to see if you’re correct, it guides your plan to success.

In conclusion, a budget without a playbook for execution is just numbers on a page. Take control of the future by looking ahead, deciding what actions are needed to succeed, and building an action plan that will shape results.

Go beyond just budgeting and build a plan for success.

Topics: strategic planning, community bank strategy, credit union planning, budgeting, playbook, crisis planning

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