How can you ensure financial alignment in strategic decision making?

I would suggest set clear financial goals, conduct thorough analyses, and integrate financial considerations into planning. Implement cost control measures, monitor performance, and foster cross-functional collaboration. Conduct scenario planning, communicate objectives clearly, and involve stakeholders. This approach fosters sustainable growth and enhances shareholder value.

Ensuring financial alignment in strategic decision-making involves integrating financial planning with business strategy from the outset. This can be achieved by establishing clear financial objectives, aligning them with strategic goals, and using data-driven analysis to guide decisions. Regularly reviewing financial performance against these goals ensures that strategic initiatives are on track and adjustments can be made as needed. Engaging cross-functional teams in financial discussions fosters a shared understanding of financial implications, promoting cohesive and informed decision-making across the organization.

Garantir o alinhamento financeiro na tomada de decis?es estratégicas é essencial para o sucesso e a sustentabilidade de qualquer organiza??o. Ao avaliar sua situa??o atual, você pode implementar uma solu??o única: a integra??o de uma abordagem orientada por dados e uma cultura de transparência financeira. é crucial realizar uma análise minuciosa das finan?as da empresa, identificando áreas de for?a e fraqueza, oportunidades de crescimento e potenciais desafios. Isso pode ser alcan?ado por meio de relatórios financeiros detalhados, análise de tendências e proje??es de fluxo de caixa.

Every strategic decision will always have a huge financial commitment, in addition to time & resource commitment; hence, for each strategic move, a tentative (but realistic) estimate drawing down the worst case scenario needs to be drawn up, which should then help the organisation prepare for such eventuality, thereby navigating the path undertaken with ease, and at least one less thing to worry about.

Financial alignment in strategic decision making requires SMART objectives so that input and output can be measured. The planning and execution has to go beyond numbers and include non-financial factors to include all resources for the project.

Para garantir o alinhamento financeiro na tomada de decis?es estratégicas, é essencial alinhar suas decis?es com os objetivos financeiros e estratégicos da empresa. Isso envolve entender claramente os objetivos de curto e longo prazo da organiza??o e garantir que cada decis?o contribua para alcan?á-los. Ao avaliar uma decis?o estratégica, leve em considera??o como ela afetará os resultados financeiros da empresa e se está alinhada com as metas estabelecidas. Isso pode envolver uma análise detalhada dos custos e benefícios associados à decis?o, bem como a considera??o de possíveis impactos futuros.

I feel every business that a person is in to is for the purpose of making profit and hence any strategic decision would definately impact your profitability. Hence, strategic decision shluld be made keeping in view your goal of profitability and longevity of your business.

Next you need to be clear with the destination you want to get to. I strongly recommend that it be clearly defined, with a longer time frame and represent a stretch goal or BHAG. It needs to be something everyone can be inspired by and where they can see their part in getting there. Once you know the destination and your starting point, you can start building the year over year plan to get to your destination with enough detail for all your players. I suggest using Hoshin Planning and Target Costing techniques for doing this. Under this, goals and targets for profit and costs/margins are deployed to each segment. R&D folks are given budgets and goals. M&A is explored to fill gaps. And everyone has to develop plans on getting there.

A clear strategy lends to effective and efficient work decision and output. It cuts out things that may unnecessarily distract from the achievement of the main goal. This is why you should have a clear plan and objective. As a consequence, you are able to appropriately align financial objectives with targets and work milestones.

Sure, there is a link between the price and quality, but there is also a risk factor multiplying all previous data, which brings this all together to a certain exposure. Everything must be calculated by a professional portfolio risk manager.

Does my budget align with my proposed visions for growth/change?? Effective communication with all necessary stakeholders is essential when making strategic decisions that will have significant impact upon business operations and consumers. Maybe your budget is reflective of needing to move iteratively and incrementally rather than doing an overhaul of an operation/s. I prefer to review things from the proposed end-state angle. Considering the proposed conditions necessary to achieve the defined goal. To institute this effectively you must have continuous conversation in each phase of the plan. Most importantly, “EVERYONE IS NOT A STRATEGIC THINKER”. It’s a fact, communication enables the elimination of impediments at every phase.

Hoshin Planning and Target Costing forces communication and collaboration. It can't be done in silos because everyone gets a good picture of the whole objective and their part. It also often requires different parts of the organization to get together to collaboratively get to the goal. Supply chain needs to establish partnerships with suppliers, engineering with productions/QC/field services, IT with everyone, facilities with everyone, customer reps with the customers, HR and management with employees/ unions/benefit providers, treasury with banks and investors. No stone should not be turned over and not examined.

The art of effective communication is an invaluable asset to any institution and individual. Your goals, mission, vision need to be adequately explained the imbibed by the very people you work with and those you work for. Note that your stakeholders include staff, friends, consumers of your product, your community, regulatory bodies and so on. Get them involved, get their feedback and engage them because their feedback is crucial to the success of your business..

Exactement, j’ai déjà parlé de ?a en répondant sur la première partie de cette exposé. Exactly, I have already spoken about it answering on the first part of this text.

I fully agree on this. Any strategic decision shall be discussed with all the stakeholders and align fully with them. Any decision must be owned and driven by the respective stakeholders. Decision in Board Room by a small group of people without buy in from next level of team may lead to failure of the decision. To know the customer expectations, opportunities in the market, shall be aligned with sales & marketing, to know the capabilities of implementation shall be aligned with R&D and operations, lastly financial assumptions and objectives must be aligned with Finance team.

I have always witnessed things taking their own direction & shape, once you set things in motion. Initiation is the only planned act in the entire process, everything else is continously adjusted by real-time feedback, scenario and small updations, which make all the difference between a winning strategy vs an unsuccessful one. A balance needs to be struck with the objective of "whether an adjustment on account of developments is absolutely essential for this to grow & sustain or should I ride this out"

For every goal there need to be a measure. Additionally, you need a balanced scorecard of about 18 to 25 metrics covering key stakeholders (customers, investors, employees, suppliers, regulators, and the future). Track and monitor them. They are the dashboard to help you keep from flying the organization into a mountain. Also, as with any pilot, have pre-planned scenarios established for what to do when the warning lights go on. Run simulations so you can react nimbly (instead of hitting the mountain). Do the training as a team so everyone is familiar with their tasks. I know it won't cover every scenario, but it should develop "muscle memory" that will serve you well for the unexpected.

KRAs and Goals sheets provide a structured framework for setting, tracking, and adjusting financial objectives in alignment with broader organizational goals. This helps ensure that financial alignment is maintained in strategic decision-making.

Strategic decision making are based on forecasts and performances. If prevailing conditions are at odds with forecasts, adjust the forecast to be in line with the strategic plan.

In order of example, in Compliance there is Ongoing Due Diligence process, which could be compared to permanent Financial analysis to avoid any misunderstanding or even more unpleasant events. Finally, sooner or later those who expect certain results, will get ones that were awaited. There is also a psychological aspect of all these measures : to be able to wait a right moment. The advice: do not miss this right moment, begin to act, and do not miss the opportunity that is arisen on the horizon. I would like to compare Compliance and Art, which were never compared in this financial strategic conversation. The origin of comparison is related to creation. Both of domains linked to the creative process of thinking.

Either it is ongoing business or new strategic decision, there must be periodical reviews to have improvement. Like we say change is constant, improvement is also constant. There shall be a robust reviewing method. For example: PDCA. Plan, Do, Check and Adjust.

Decision making will be a mix of both process and instinct. By improving and training people on the process you address/improve consistency and reliability. However, some decisions need to be made with uncertain information, incomplete options, and very little time. Some people have the intuitive ability to see danger or opportunities with clarity and confidence. If you are or have one of these people on your team, don't ignore their counsel.

I would say, communication, communication and once more communication. Do not loose the vibe of good sense either. Stay closer to your dream learning from others mistakes, and never forget the beginning of your journey. Remember that the best things happen in your life because there was an occasion and your good will. Even if you made a mistake, try to understand why it happened to you. May be, there is no other way to understand the outcome… The best creations happen as the result of someone’s mistake.

Reflecting on past decisions is a treasure trove of insights. It is about cultivating a learning organization where each decision, successful or not, adds to our collective wisdom. This iterative process of learning and applying is how we sharpen our strategic acumen.

De uma forma geral, os profissionais no Brasil tendem a achar que Finan?as é um tema para ser administrado pelo "pessoal lá do financeiro", ignorando que trata-se de um tema vital para qualquer empreendimento (capitalista, governo ou do 3.o setor). Em cursos e palestras, eu sempre destaco uma frase do cantor Falc?o: "Dinheiro n?o é tudo, é 100%". Significa que qualquer empreendimento, de cunho privado ou social, vai precisar de alguém que planeje e administre o funding, os or?amentos, o fluxo de caixa, as receitas, custos e despesas. E isso é t?o vital que n?o pode ser responsabilidade de apenas 1 depto. Por isso, recomendo sempre que as empresas promovam cursos sobre "Finan?as para N?o-financeiros" para todo o time de gest?o. ;-) $$$

Stratigic Desicion includes many things like goal, capacity, targetted market, available budget etc... Maximum utilization of available resources, minimum outsourcing of work and appropriate usage of Technology can have massive impact on budget

Jorge, excelente reflex?o me lembrei do início das opera??es do Carrefour no Brasil onde atuei como gerente de setor e tínhamos na fun??o a descri??o de cargo completo. Onde éramos responsável por toda gest?o inclusive de RTM Remunera??o de tesouraria sobre mercadoria.

With business dynamics constantly changing, I am a strong believer in experimentation. I'd clarify the financial situation and budgets for a given strategic decision with the team. If, for some reason, things go out of alignment, I would encourage the team to bring solutions about how we can balance it out in some other way. When team members are empowered to take charge of a strategic decision, they own those decisions, and that awareness and empowerment help them to align better managing the budgets.

In addition to the financial and analytical aspects, we must also weigh the ethical, social, and environmental impacts of our decisions. Responsible leadership means ensuring profitability while also being stewards of the broader community and environment we operate within.