Execution: The Discipline of Getting Things Done

by Larry Bossidy

Most sizable businesses spend weeks or months preparing their budgets. This is unnecessary, and a great waste of time. You probably recognize that it can and should be done much faster. But would you believe you can prepare your budget in three days? We know a number of companies that do it. The starting point is a robust dialogue among all the relevant business leaders, who sit down together to understand the whole corporate picture, including all of the relationships among its parts. We call this the principle of simultaneity. Almost all budget or operating plan exercises are done sequentially, bottom up and top down: the goals and general assumptions come from the top, and the businesses generate the particulars. But sequential budgeting misses the power of simultaneous dialogue, which generates insights on the totality of the business and links its moving parts into a whole. The dialogue takes place in a three-day session that includes all of the business unit leader’s direct reports, line and staff. They’ve all previously been given the initial cut at the broad assumptions for the external environment, along with a set of competitor analyses and the financial and other targets for the year, quarter by quarter. The meeting focuses on the roughly twenty lines that, in just about any budget, account for 80 percent of the impact on the business outcomes. Among these, for example, are revenues by product mix, operating margins, marketing expenses, manufacturing costs, engi...