Insights About Budgeting – 1

Each round of budgeting, forecasting and review, helps me learn something. And this round (after finishing our first forecast), I observed the following:

What happen when the boss ask a question (during review) that you have not thought about?

Coming into budgeting/forecasting review, you need to be well prepared. Because an experienced boss will have a knack to ask that one question which you have not been prepared for! I have seen it over and over again.

3 suggestions to answer the question:

  1. Punt (you may need to look it up, because the wrong definition of this word would lost the explanatory power of this point) the question down the road
    • “Sir, the information is not at hand, can I get back to you next week?”
    • “Sir, we don’t have enough time to get into it today, as we still have x number of agenda to go, can we schedule another session to go through in details?”
  2. Use your best guess
    • There’s huge risk involved here as your guess could be wrong, exacerbate an already volatile situation. Deciding when to use this option does depends on the boss’ patience level, but also how much of the answer is guesswork, and how much you do know is a fact
  3. Use logical deduction to arrive at a reasonable answer
    • This requires quick thinking, some people are good at it, but not all. So know yourself before you opt for this option.

I trust the above musing will stimulate your thinking on this topic. There could be more answers I have not thought about. Feel free to join the conversation below.

Till next time…. happy working!

Aspiration vs Commitment

Let’s talk about one of my favourite topic today. The idea that what we budgeted for, what we signed off in our yearly goals, and/or what we forecasted, is a commitment to deliver the results, instead of being an aspirational number. What’s the difference?


Aspiration means what we wish the numbers to be. At it’s best, its a dream. At it’s worse, it’s just numbers given to keep the boss happy. However, we are operating in an environment of public listed companies (which many of us are), therefore all numbers are taken as given, therefore not being realistic and serious about the numbers create serious problems for the organization. I have no doubt this is the default position for many budget owners, just give the boss what he/she wants, so that they will get out of my face. This is akin to kicking the football down the road, and deal with it later.


Commitment means we made a promise to deliver.  Here’s a tip.  The best way NOT to impress the boss is not to be too clever to work the system.  The best way is to show you know what you are doing, that you know your business well, that you deliver consistently, and commit what you promise. No bosses like surprises, the ability to accurately read the near term future (seems like an impossibility right), the early communication of troubles, these are valuable traits which bosses values.

Of the many things I learned over the years, one of the most important lessons to learn is to understand, in your business, what are the drivers for the numbers. This applies to both top line and bottom line numbers. Just like in problem solving or root cause analysis or FMEA, don’t stop at asking why one time. Ask 7 times, and you will be amazed by what you will discover. But this is a topic for another day.

If you have read this far, then you are ready to answer this question. “The numbers I have committed, does it reflects my ability?” “Will achieving the numbers reflect my potential, my result driven nature, my talent?”

Speaking of which, time to go check my numbers now!

Signing Off

In your experience, when do you get to sign off your yearly KPIs? End of January, February or March?

It is always a mystery to me why we have trouble getting this important task completed on time. Surely we do not want to start the race and not knowing where or when is the finishing line?

So it got me thinking, what is holding us up? Here are some of the reasons I can think of, or have experienced in the past.

1. Prioritization
Not making this an important part of your plan to succeed.  You have always enjoy being reactive to work situations, and pride yourself on your ability to think on your feet, and feeling satisfied with ‘saving the day’. 

But have you ask yourself, could I be doing more if I plan my time wisely and have clear goals and objectives to maximise my time and effort.  Could my career be shining brighter and by now?

2. Procrastination
Putting it off because it is not a pleasant task.  Doing deep brain work is not your cup of tea.  And you keep trying to find the right time to do it, but new tasks cropped up everyday, and so it is defer again and again.

The question for you is, do you start production without planning?  Do you start your journey without looking at the map?  Having the KPIs plan signed off is planning the journey, much like filing a flight plan before flying.

So let’s work harder to get it signed off and get to work.

For the leaders: once you have your KPIs sign off, there’s still work for you to cascade down to your team, so our planning is not over yet.  While it is much latter than I wanted it to, we still can make it worthwhile.

Common Pitfalls with Setting KPIs

As we reach the deadline for setting your annual KPIs, goals and objectives, here are a review of the common mistakes.

1. The goals are too general or generic
I have seen this in the KPIs recently.  “To improve customer service in the department”.  This is too general.  How do we know you have achieve it?  I once heard a famous speaker said that “if your target is anything, you will hit it every time!”.  So when you said you wanted to improve customer service, are you referring to internal or external customers, are you doing an independent survey, NPS score, or conducted internally? And how do we set the baseline, is it an arbitrary score, based on national average, or we just need to get a survey out so that you get your boss off your back. And since it is our first year, let’s just set it ridiculously low, like 2 out of 5 to be safe.  

2. Measuring activities that are easy to measure
If you are new to KPIs or goal setting, it can be a little overwhelming to get started.  Some things are easy to measure, like sales, profit or stock turnovers or stock levels.  But if your job involves more intangible or subjective work, it gets challenging.  For example, your job is Learning and Development.  The easiest things to measure is which month I will complete my training plan for 2019.  But is it a relevant measurement in terms of adding value to the organization? Sure getting the training plans ready is important, but how about executing your plans?

3.   The goals are achievable and attainable
When we set goals, there are many factors driving it.  It could be you needing to please your boss, OR it could be you wish to stand out, therefore an ambitious goal will help you get notice by your boss.  Whatever the reason, the goals can be impossible to achieve.  For example, you want to improve your Days Sales Outstanding (DSO) by 20% this year, is it achievable?  Have you done a close review on the challenges and what has prevented it from being successful in the past?  An unachievable goals can have detrimental effect on you as well as on your team. You either give up early, not bother to try, or the goals set have no bearing on discretionary efforts whatsoever.

4. Set a nice goal but it does not relate to corporate objectives
You have decided that a worthwhile goal to set is sell your product in every state in the country this year.  However, there’s only 2 of you, and because it is a new business, budget is limited.   Your organization strategy is to focus in the main metropolitan area so that customers can be adequately support and also where most of the business opportunities will be. In another words, it is not relevant to the overall corporate objective.

5. Set a goal without any time sensitive deadline
This can range from goals statement that is very general – “Improve customer service”, “Increase efficiency in our billing process”, “Enhance communication among the team”.  There are 2 things that we are able to improve here.
Firstly, add more specific details in the statement. Example: Increase the turnaround time for “Order to Invoicing” by 25% (from 4 days down to 3 days).
Secondly, add a timeline to the goal statement. Example: Increase the turnaround time for “Order to Invoicing” by 25% by June 2019

If you have been alert, you will realised that I have just outlined the famous SMART goals principle. Sure it is ubiquitous when it comes to goal setting, the reason I have mentioned it is because it is not commonly applied! Go back and check your goals, do they PASSED the SMART test?

Till next time…

Writing Reports

As I review report and KPIs for the past one week, it struck me that there’s still much to be learned in terms of how to function in an organization. Take for example, writing a report.

  • Don’t write report as if you are reading it, and it is for your own consumption. Imagine the reader that read your report, if they do not have the some intimate knowledge as you on the topic, would they understand easily what you have written?
  • Making it easier to read is a good idea.
  • Aim for a quality report, check your grammars, sentence structure, tabulation errors, etc.
  • Raising the level of quality of reports and presentation is a key step to grow yourself as a good leader and manager in the eyes of your bosses.

Why is writing report an important part of maturing?  Imagine your boss who has a lot of responsibilities at hand than you would have, his time is limited, so his best avenue is to use summarized reports to know what’s going on.   Furthermore, the report will most likely be seen at least one level higher than your immediate boss.  The nature of information is that the further remove from the field, the more understanding is required to understand the information at hand.  So make it easier for your boss.  He will definitely appreciate it.

One last advice, please check your formatting and typo errors, there’s nothing more irritating than having to deal with simple errors that could have been easily fixed in a couple of minutes.  It shows your lack of attention to detail, and maybe even lack of pride in your work.

Writing reports are bread and butter of all aspiring managers.  Master it.  Be concise, be clear, and be accurate.  Most important of all, be timely (!).

Until next time…

Happy Working

Setting a Yearly KPI for Direct Reports

A few weeks ago (2nd week of January), I sat down with one of my direct reports and his team, and spoke about setting goals for the year.  I thought we had a good, albeit brief, session, with lots of interactions, clarifying questions asked, explanation given etc.  It was only later in the evening, the team lead shared with me that the team members were slightly disappointed with the session.  I was taken aback, and quickly asked why it was so.

Here’s a summary of the “feelings”:

  • why can’t the boss just tell us what to do instead of another motivational speech? Hmm… do some staff just want to be spoon fed instead of justifying their existence?

What kind of direct reports work for you?  In my experience, there are three main categories:-

1)  They have no ideas and wait to be told what to do

2) They have ideas but not necessary the right ones

3) They are self initiated to justify their pay

It is now February, how are your yearly plans going so far?  With January gone, there is enough data to start a preliminary analysis.  The key to sustaining goals is to perform frequent checks.  I will be doing it this week.  Hope to share some new learning points by end of the week.

Have a productive week ahead…

Hello World!

Welcome to my humble little world of Productivity and Leadership!

Thank you for taking the time to visit.  I’m always humble when people wants to hear what I have to say.  So I shall not disappoint!

In this first post, I would like to take the time to expound on why I titled my blog Productivity and Leadership.

Reason #1:  I’m an Accountant, thus certain acronyms are always on my mind.  None more important though than P&L.  So it kinda fit.  It’s also symbolizes my life journey from being an Accountant to a Corporate Executive.

Reason #2:  The spark for starting this blog was my desire and requests by those who know me to speak about leadership.  However, after six months of procrastination, I realized that (at least for me), leadership is only effective with productivity.  They go hand in hand.

Reason #3:  When I started to lay down a plan for this blog, I did a lot of research to psych myself up for a great 2015 (yes, I made some new year resolutions!), I was so charged up that I wanted to share what I have learned and share my journey with my readers as well.  But doing two separate blogs was going to be too much.  Thus a merger is formed.

My posts will centered around Productivity, Leadership or both, to be published every Friday.  As mentioned above, I am learning so much about productivity and leadership at work, there is much to share.

Just a peek…

Part of getting ready for this new blog was using personal challenge techniques to push for a breakthrough.  Here’s what I used last few days.

You can use any other similar tools and techniques to get you going.

Here’s to a brilliant 2015!


Michael Wong
T: @michealwong