We don’t care what the plan says

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• April 20, 2011
• Tor Inge Vasshus

Research indicates that 60% of corporations don’t link resource allocation (budgets) to their Strategic Plan. I am wondering how companies manage to execute strategy when strategic planning and resource allocation processes are not linked. To me, it looks like the company is on “auto pilot” and does not respond to new strategic directions very well.

I have been following the work by Kaplan and Norton lately where they talk about a specific resource allocation category – namely Stratex – Strategy Expenditures. Strategy Expenditures are resources allocated to “move your company towards your strategic goals”. This is an investment program that you do in order to successfully implement your strategy. By naming Stratex you know that these are funds that are not connected to your day to day business, but it is specifically connected to fulfilling your strategy.
I challenge companies that I meet to do one exercise – connect their projects to strategic objectives. In doing this they can see how their projects fit with the strategy.
If you work in the finance department with budgets and money – come down from your money mountain and start engaging in Strategy Execution.