Tuesday, 22 April 2014

Empowering your employees

Too many businesses in South Africa see their employees as a problem to be managed as opposed to an asset to be optimised. Your business is nothing without strong employees, your business plans and ideas need reliable invested employees to become a reality. The strength of your business is wholly reliant on the strength of your workforce.

I believe that organisations thrive when non-financial managers can easily find, read and understand financial information that is relevant to them; particularly their budget and spending information. When people understand how their financial decisions affect the rest of the business they are empowered to manage them properly, and only then can they really be held accountable for those decisions.

Yet that level of transparency, particularly with financial information, can be threatening to some executives and business owners that feel that empowering their middle managers somehow threatens their own power; so instead of taking action to provide true transparency in the organisation, they make a big show of rebranding, sponsorships or event-based team building. A real team is built through shared goals and understanding, input and responsibilities for those goals.

Transparency is achieved when information is current, reliable, stored in a single place, easy to find and easy to understand. When this is the case, operational managers are empowered to take responsibility for the part of the organisation’s financial well-being that is in their power.

When your staff feel valued, when they believe their input is being taken into account and their knowledge is helping to build the business they are a part of, when they have a clear understanding and overview of what is going on with the business; they feel responsible for and accountable to the organisation as a whole.


This is not only true of financial empowerment, wherever you provide your employees with real opportunities to develop and own their position within their team and within your business, there is an increase in their sense of pride in both their role and the business as a whole. That sense of pride translates into an increased feeling of responsibility, employee satisfaction and productivity. This is not only good for business itself, but also for the reputation of your business – nobody sells your business and all it stands for better than a dedicated, happy employee.

Monday, 14 April 2014

Dynamic Budgeting – The good, the average & the ugly

Your budget should be one of the most important documents guiding your business decisions; but to get the most out of it, it needs take into account multiple “what if” scenarios.

A dynamic budget is based on a solid budgeted fiscal set which can then be extrapolated for multi-year budgeting using assumptions. These assumptions are set by you according to the elements that your business faces and should account for multiple scenarios from optimistic through neutral to pessimistic and be able to be applied at cost centre and account level.

Changing markets and inflation, new hires and salary increases, depending on your business something as seemingly unimportant as the weather temperature; all changes from within or outside your organisation can have a major impact on your bottom line.

Considering the tremendous affect any number of events could have on your budget and your organisation's financial health, being able to view versions of your budget that reflect the good, the neutral or the ugliest eventualities will give you a far fuller and clearer picture of where you are headed.

"What-if" assumptions can show you the companywide implications of anything that can potentially affect your business, allowing you to account for these developments. Assumptions can be set up and adjusted as and when needed to calculate specific increases and decreases per year or per period.

The resultant dynamic budget fiscal set with all the appropriate security and settings, can then be shared with end users for their input and commentary, to ensure you get a view from those on the ground. Their feedback might be that your assumptions are far off base from the realities they are facing and you will then be able to go back and make adjustments accordingly.

Dynamic budgeting allows you to prepare for almost anything your business might be faced with, allowing you to anticipate and plan for your business’s future.