The most disruptive thing ever…? All businesses want to disrupt their markets in some way. And there is more than one type of disruption. The most disruptive thing ever…?
Did you know that the first ever recorded Budget was by a kingdom?
“The budget began in England. As early as 1760, the Chancellor of the Exchequer presented the national budget… The purpose was to check the king’s power to levy burdensome taxes and control spending of money by public officials.” Has anything changed…?
“It was a similar government-led origin story across the Atlantic that first launched the business budget in boardrooms across the world.
The first US president to lobby for a government budget was 27th US president William Howard Taft. In July 1911, budget forms were prepared and approved by the President. Like with the majority of today’s business budgets, these forms were sent to department heads, to be filled in by them and returned…”
Business Budget –
“The origins of the business budget began with US business titans. The roll call of legends included James O McKinsey (June 4, 1889 – November 30, 1937), Donaldson Brown (1885-1965), Alfred Sloane (1875-1966) and in a different generation, Marvin Bower (1903 –2003).”
I remember preparing a Budget. I wanted to be as accurate as possible considering the past, what I knew about the future, and scenarios I and my teams could think of. A senior person said to me, “Don’t spend too much time on it, it’s an academic exercise. You get paid on actuals.”
Both comments were right.
Budgets work in 12-month periods, and we get paid for the performance in those 12 months. And a Budget is based on a snapshot in time, today. What happens after the Budget has been agreed to, well “that’s life”.
Both governments and businesses look at Budgets in the same way.
An academic exercise based on a snapshot in time. What happens after that, well “that’s life”, next year they get to do it again.
Problem…
When Budget is met, the drafters of that Budget were great in that year.
When Budget is not met, it was the market, weather, economic climate, etc.
Nothing wrong with Budgets.
If it is not the reason or excuse for life happening.
The most important thing… business happens for life, not in 12-month cycles.
And this is the biggest problem – short-sightedness by people who have stewardship of the economy and therefor people’s lives.
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