I’m currently reading the book “Good to Great” by Jim Collins.
The book is a compilation of evidence-based findings on what qualities and structures make a company go from good to great.
Budgeting is something all businesses encounter. And with the thousands of functioning businesses, there’s certainly a lot of variety.
Some handle budgeting like you would a cranky toddler, place it out of sight as soon as possible. While other companies view a budgeting as a mystical concept without consequence.
But how do great companies budget?
In a good to great transformation budgeting is a discipline to decide which areas should be fully funded and which should not be funded at all.
It appears to be very black and white.
In other words, the budget process is not about figuring out how much each activity gets but about determining which activity best supports the primary function of the business. What they can do better than anyone else.
So when budgeting, whether for your company or your personal life, budget with the mindset of solely supporting things you like and eliminate funding for things that do not support your best functions.