Budgets are boring. They’re easy to create. Simply take last year’s spending and multiply it by an inflation factor or an across-the-board budget cut percent. Voila, you’ve got a budget.

Easy activities rarely determine an organization’s success. Creating a budget is relatively easy and not mission critical.

Strategy is mission critical. Strategy determines success or failure. Yet leaders spend far less time on strategy than on budgets.

During my 20+ years in consulting, I’ve seen many budgets but few strategic plans.

If you need to excite yourself and your “troops”, there are two steps that must take place before the budget.

Step 1: Strategy
If you’re satisfied with the way things are, then you don’t need a strategy. Just keep do’in what you’ve been do’in.

But if you’re not satisfied with this year’s results, then you’ve got to implement change. What do you change? That’s determined by your strategy.

A strategy is what you intend to do differently to win in the marketplace.

I focus on strategies that fall into one of three categories:

1. Focus on being unique. Define a niche for your existing products or services. Complete the sentence “We are the only organization that _____________.” Author Doug Hall says “If you’re not unique, you’d better be cheap.” Zipcode Honey or Texas Organic Lawncare are examples of niche strategies.

2. Focus on being the best. Provide what your competition does but more efficiently and effectively. If you’re a baker, make sure your cake tastes better than anyone else. If you want to make it unique, fine, but you’ve got to deliver the best quality. Amazon.com and Google are examples of companies whose strategy is to be the best retailer or search engine.

3. Focus on invention. Identify a new customer need and satisfy it with something you invent. Possibly the customer doesn’t even know they have the need. Facebook or Apple are examples of companies whose strategy is to invent social media or smartphones customers didn’t know they wanted.

Step 2: Plan
Define a 1-page plan to implement the new strategy. For an example of a 1-page plan CLICK HERE.

To be successful, a strategy must have a written, doable sequence of activities to achieve a distinct, measurable goal. And to be successful, the plan must be communicated to all employees.

Step 3: Budget
Unfunded plans fail. Create a budget that financially supports implementation of the plan.

A budget is the last step to success, not the first.

It does not require a PhD to predict that technology has and is going to continue to significantly change our corporate and personal life. Peter Diamandis, author of Abundance: the future is better than you think, recently asked readers “What do you believe won’t change over the next two decades?”

One thing that won’t change in the next 20 years is the proven sequence of strategy, plan and then budget.

“People are far more interested in what works than what’s true.”

This quote by Andy Stanley reminds me of my college macro-economics professor.

Professor Hayashi repeatedly said, “In theory, this is how the market is supposed to work.”

My professor taught what was true but failed to tell me what works. He taught sound theory. He drew investment curves and mathematical equations to demonstrate when interest rates drop, borrowing and investment increase.

In theory, that is true. But it did not work following the Great Recession of 2008. Business investments, jobs and GDP did not grow, even with the Federal Reserve offering zero interest to banks.

What works to bring an economy out of recession? Entrepreneurship, a word Prof. Hayashi never mentioned in class or in my textbook.

What’s true can be what works, but it’s frequently not. I’ve learned over the past 60+ years that what works and what’s true are often diametrically different. Here are some examples:

• It’s true that having a high FICO score can make borrowing money easier. What works is spending less than you make to stay out of debt.

• It’s true annual performance reviews can identify an employee’s strengths and weaknesses. What works are daily coaching sessions where your manager simply asks “What are you working on? Do you need any help?”

• It’s true that memorizing answers will get you an “A” on school exams. What works to achieve success in life is learning how to ask great questions.

• It’s true most business text books recommend every business have a detailed strategic plan. What works is a 1-page plan because it’s easier to create, communicate and change.

• It’s true that it’s good to follow your passion. What works is following opportunity. There are 5.8 million opportunities (jobs openings) in America in 2016. Don’t follow your passion, but bring it with you to the opportunities that present themselves.

Andy Stanley’s primary point in making the statement that opened this blog is this: Virtually no one that attends his church is on a truth quest. Instead, they are on a quest for what will work for them to make them happy, at peace and successful.

What truth have you experienced that does not work in your personal or professional life? 

Do you work in a good company but not sure what the future holds?

If you answer “Yes”, you work in a non-prophet company.

What is a prophet?

The English word prophet comes from the Greek word προφήτης (profétés) meaning advocate or speaker. Every successful organization needs a prophet who advocates for a bright future.

In business, prophets describe a better future and lead a process to achieve it. The Wall Street Journal called Steve Jobs a secular prophet. Jobs was extraordinary in countless ways—as a designer, an innovator, a leader. But his most singular quality was his ability to articulate a form of hope through a strategic plan.

If you and your leaders have not discussed corporate strategy during the past twelve months, I don’t need the gift of prophecy to accurately predict your future. If you keep doing what you’re doing, you’ll keep getting what you’ve been getting.

Business prophets consistently influence what happens in the next twelve months by defining a strategy. A strategy is “a coordinated and integrated set of five choices: a winning aspiration, where to play, how to win, core capabilities, and management systems.”

3-Steps to become a corporate prophet

Step #1: Read Playing to Win by A. G. Laley and Roger L. Martin. This book is the playbook used by super-successful Procter & Gamble. By reading it you will know more about how to create a successful strategy for adding customers than anyone else in your company.

Step #2: Write your company WHY. Push aside your corporate mission & vision statements and author a 7 to 8 word WHY your company exists. Simon Sinek says in his best-selling book Start With Why, “People don’t buy WHAT you do, they buy WHY you do it.”

A committee cannot write a good WHY. It will be frustrating and you’ll end up with a camel instead of a race horse. Writing a WHY is a one person job. Your job.

Defining your organization’s Why is the simplest, most powerful method to prophesy your future. CLICK HERE to request a list of the 8 characteristics of a great Why statement and several examples.

Step #3: Seek out a mentor. Find someone who has achieved what you want to achieve, and is available to respond to questions from you, in order to help you achieve your goal of defining a prophesy for your organization more quickly, with less friction. A mentor generally waits to be asked for help, and is reactive more than proactive. If you want to discuss mentoring CLICK HERE.

A prophecy is no good if you don’t end up somewhere new and better.
I prophesy the three steps listed above will get you started on the path to a brighter future.

As a Baby Boomer, I believe my preference for brevity was influenced by a 1950’s TV show Name That Tune. The contestants who could identify a song listening to the fewest number of notes won money, i.e., “I can name the song in 3 notes.”

Someone asked this week for a definition of leadership. My response was 3 words: creates meaningful improvement. That’s what a good leader does. He/she creates meaningful improvement.

Creates

• A good leader does not copy, they create. Creation begins with a blank sheet of paper, not a photocopy of some other organization.
• Leaders create company culture. Company culture is a collection of daily habits. Culture makes work worth it.
• A leader creates the strategy, followers the plan. In the military they refer to the strategy as “the commander’s intent”. A leader writes on 1-page the why, what, where and who. Followers create the how. To learn how to create a 1-page strategic plan watch BullsEye video.

Meaningful

• A leader defines WHY the company exists. The WHY statement has 3-7 simple words, is Big & Bold, has an AHA effect, involves everyone and is not about money. Watch Simon Sinek’s TED talk.
• A leader focuses on important activities, not trivial tasks. Leaders work “on” the business, not “in” the business.
• A leader focuses on essential things. Things that have meaning in the lives of customers and employees.

Improvement

• A leader makes the status quo less appealing by pointing out the inherent challenges, risks, and downside of not changing.
• A leader does not change things, they improve them. People don’t like change but they love improvement.
• A leader aligns strengths in ways that make our weaknesses irrelevant.
  Leadership is not title or position

You can be promoted to a position of leadership, but promotion does not make you a leader. You can even own the company and not be a leader. There is a big difference in headship and leadership.

Headship is a job title. Leadership is creating meaningful improvement.