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A Planning, Budgeting, and Performance Measurement Template






















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Planning and Budgeting

Planning and budgeting are essential for management control.  Effective planning and budgeting require looking at the organization as a system and understanding the relationship among its components.  

Planning consists of developing the objectives (the work required to achieve the organization's goals), timetables, and performance standards needed to implement the organization's strategy and assigning individual accountability for results.   

Budgeting involves identifying, prioritizing, acquiring, and allocating the resources needed to carry out the plan.  

Strategic thinking and planning are different activities and require different mental processes and insights.  Strategic thinking is a creative activity whereas planning is an analytical one.  This difference in thinking can make it difficult to accomplish both of these processes at the same time.

The products of strategic thinking are goals and strategy.  The products of planning are objectives, budgets, schedules, performance standards, and a baseline to measure and evaluate performance.

Symptoms of incomplete or inadequate planning and budgeting

  • Management activity is largely reactive, stressful , and disorganized.

  • Authority and accountability for results are unclear or highly centralized.

  • Funding and other resource priorities are unclear or non-existent.

  • Cash flow problems are common.

  • Persons responsible for activities have difficulty obtaining the necessary resources.

  • Objectives, schedules, and budgets are not established or are not communicated to persons responsible for action.

  • Performance expectations are not specified or achieved.

  • Unexpected workforce reductions or excessive overtime are common.

  • Untrained or inadequately trained employees are assigned important tasks.

  • The organization has recurring difficulty meeting customer delivery and service requirements.

Three Sigma's services

We assist executives establish a formal planning, budgeting, and performance measurement process  and create a time phased performance measurement baseline  integrating operating, financial, and investment activities.

We build customized, interactive organizational models that integrate planning, budgeting, and performance measurement and instruct and coach clients how to use these models.

For executives who choose to improve their planning, budgeting and performance measurement systems using their own resources, we provide a roadmap to guide them through the process of goal setting, strategy formulation, setting objectives, developing budgets, and establishing a performance measurement baseline.  The following models are available on this website and can be copied or downloaded free of charge.

We provide coaching on-site, by phone or e-mail to help or facilitate using these models.

Expected results

Planning enables the organization to anticipate and prepare for the future.  Cleary defined objectives provide the means to delegate responsibility and accountability to those who will do the work.  This spreads the workload across the organization and frees top management to focus on strategic issues.  A strong management control and information system provides the information needed for timely corrective action.  

An effective planning, budgeting, and performance measurement system should produce the following results:

  • Proactive management activity and time for strategic thinking and planning.
  • A focused, disciplined organization with good coordination among functions and activities.
  • Higher productivity and greater operational efficiency because of better work planning and coordination.
  • Crises and unanticipated events are contained and managed effectively.
  • A stable, well trained workforce performing key tasks.
  • Planned goals and objectives are regularly achieved.
  • Customized organizational models significantly reduce the time required for planning, budgeting, and performance measurement.

Copyright 2002 Three Sigma, Inc.