Move guide

Make the money and people follow

Your report suggested a move on at least one of these four practices:

whether money and people follow the strategy;
the shape of the initiative portfolio;
whether the business stops things;
whether capabilities match the choices.

This move guide makes the budget follow the strategy. The top priorities get named people and protected budgets, the initiative list gets short, and one exit gets finished. The few capabilities the strategy needs are funded like investments.

1. When it applies

Use this move guide if your report placed any of these four practices in the lowest two stages.

Practice	Where it may sit today	Where this move guide aims
Whether money and people follow the strategy	Lagging: "The budget is last year's plus inflation; the strategy changed and the money didn't." Basic: "Strategic priorities receive token funding after business-as-usual takes its share."	Competent: "The top priorities are visibly resourced with named people, protected budgets."
The shape of the initiative portfolio	Lagging: "Dozens of initiatives exist; nobody can list them, several contradict, none is clearly strategic." Basic: "Initiatives are listed but unweighted, a flat backlog rather than a portfolio."	Competent: "A handful of initiatives each has an owner, a rationale and a link to a strategic theme."
Whether the business stops things	Lagging: "Nothing is ever exited; every product, market and project from the last decade is still alive." Basic: "Exits are discussed each year and deferred each year."	Competent: "The business has made at least one real stop-doing decision in the last two years and finished it."
Whether capabilities match the choices	Lagging: "The strategy requires capabilities the business plainly does not have, and no one has said so." Basic: "Capability gaps are known privately but unfunded and unowned."	Competent: "The few capabilities that must be world-class are named, and gaps have plans."

If all four already sit at the middle stage or higher, skip this move guide.

It needs the strategy from putting it on one page. The budget follows that page.

2. What to do

Four steps, run through one budget cycle.

Re-open the budget against the strategy. Name the top three priorities. Show, line by line, the money and people that moved to them. The resources-follow worksheet does this, and Table A below records it.
Cut the initiative list to the vital few. Give each an owner, a reason tied to a choice, and a horizon. Publish what was cut. The initiative-portfolio worksheet does this.
Pick one thing the strategy says you should not be doing, and finish exiting it this year. The released money and people are the point. The stop-doing worksheet does this.
Name the two or three capabilities the strategy needs to be excellent at. Assess them plainly, and fund the gaps. The capabilities worksheet does this.

The four free worksheets do the recording:

/worksheets/strategy/resources-follow for the budget against the strategy;
/worksheets/strategy/initiative-portfolio for the vital few;
/worksheets/strategy/stop-doing for the one exit;
/worksheets/strategy/capabilities for the capabilities and their funding.

3. What to produce

One table, plus the four worksheets above.

Table A. The priorities, resourced

Priority	Owner (name)	Budget protected ($)	Money moved to it ($)	People moved to it	Moved from

A priority with nothing in the "moved" columns is resourced on paper only.

4. A worked example

Illustrative. Written for this move guide. It describes no client.

An engineering consultancy has four practices: water, transport, buildings and environment.

The budget.

The strategy named water and transport as the priorities. The budget had given every practice the same rise.
The re-opened budget moved two senior hires and most of the training money to water and transport.

The vital few.

Seventeen initiatives became five, each with an owner and a horizon. The twelve that were cut went on a published list.

The exit.

The buildings practice's small residential work was closed. Its three engineers moved to transport.

The capabilities.

Digital modelling was named as the capability water work needed most. It got its own budget line.

One budget cycle on.

One budget cycle on Illustrative

17 to 5 initiatives, each with an owner
1 exit finished
3 engineers moved to a priority

On a retake, all four practices could be answered at the middle stage.

What it looked like in our work

From our own work. Figures changed.

A food processor set out each improvement initiative with its earnings benefit, the capital it needed and management's confidence in delivering it.

Earnings benefit by initiative, in thousands of dollars a year Figures changed

Earnings benefit ($k a year)

Earnings benefit by initiative, in thousands of dollars a year
	Earnings benefit ($k a year)
Yield improvement	1700
Plant shift change	250
Trimming at the line	400
Procurement savings	120
By-product yields	300
Shift the sales mix	1100
Process cooling upgrade	900
Market and channel selection	600

Each bar is the initiative's yearly earnings benefit once delivered.

Initiative	Type	Benefit ($k a year)	Capital ($k)	Confidence
Yield improvement	Sustaining	1,700	0	High
Plant shift change	Sustaining	250	100	High
Trimming at the line	Sustaining	400	0	High
Procurement savings	Sustaining	120	0	Medium
By-product yields	Sustaining	300	150	High
Shift the sales mix	High capital	1,100	2,000	Medium, with a major dependency
Process cooling upgrade	High capital	900	1,500	Medium, with a major dependency
Market and channel selection	High capital	600	400	Low

The sustaining initiatives needed little capital, and management was mostly confident of them. The high-capital ones took most of the money and carried the doubts. One page showed both.

A standard tool: three horizons

A generic diagram in our own words. The idea is Mehrdad Baghai, Stephen Coley and David White's.

Spread the money and people across three horizons, and manage each one differently.

Three horizons, each paying off later than the last

Horizon 1 Defend and extend the core
Horizon 2 Build the businesses that will grow next
Horizon 3 Seed options on future businesses

After Baghai, Coley and White.

Three horizons, managed differently

	Horizon 1: the core	Horizon 2: emerging	Horizon 3: options
What it holds	The businesses that earn today's profit	New businesses starting to grow	Small bets on future businesses
How to judge it	Profit and cash	Growth and share won	What each bet has taught you

After Baghai, Coley and White. Most of the money goes to the first horizon, but not all of it.

5. Effort and dependencies

Who

Chief executiveNames the priorities and the one exit.
Chief financial officerRe-opens the budget and shows what moved.
Initiative ownersEach owns one of the vital few, with a horizon.

What you need

The one-page strategy from putting it on one page.
This year's budget and the current initiative list.

How long

One budget cycle.

What gets in the way. We have seen these in our own work:

Improvement as a side job. At a food processor, improvement was something people did in addition to their day jobs. It never got focus, and made little progress.
Holds that never finish. A services group put two propositions on hold and deferred others. Nothing was finished, so nothing was freed.
Token funding. An asset finance business funded its strategy with what was left after business as usual.

6. How will you know it worked?

The test is where the money and people went. Retake the check after the budget cycle. Each of these should be true when you answer:

Practice	You can answer Competent when	A document alone does not count if
Whether money and people follow the strategy	The top priorities are visibly resourced, with named people and protected budgets.	The priorities are named, but the budget rose evenly across the board.
The shape of the initiative portfolio	A handful of initiatives each has an owner, a rationale and a link to a strategic theme.	The list is long, and some initiatives have no owner.
Whether the business stops things	The business has made at least one real stop-doing decision in the last two years and finished it.	The exit was decided but is still on hold.
Whether capabilities match the choices	The few capabilities the strategy must excel at are named, and the gaps have plans.	The capabilities are named, with no money behind the gaps.

The worked example is illustrative.

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