The Ledger

Strong Strategies Require Balance

“Successful strategy execution calls for skillful orchestration of sometimes opposing forces and competing needs.”

Putting a strategy into practice can be very difficult. The main obstacle to executing strategy is the failure to balance the tensions that characterize the execution effort. Getting strategy done well often calls for trade-offs between delivering short-term results and implementing foundational changes that require time. Yet companies that can achieve a balance between opposing forces are far more likely to realize successful strategies that endure.

Read More at The Harvard Business Review >

Shorter Time Frames Lead to Better Forecasting

Brad McMillan, Chief Investment Officer at Commonwealth Financial Network, discusses the importance of time frames in economic forecasting in a recent Forbes Magazine article. He claims that when shorter time frames are used, you can have better visibility than over longer periods. The goal is to identify signs of trouble ahead and then reacting to them instead of predicting when they will show up. Over longer periods, though, the variability and potential for surprises make forecasts increasingly unlikely. It’s much better to keep an eye on the data, develop warning signs, and watch for them rather than watch the calendar.

Read More at Forbes Magazine >

Zero Based Budgeting: From Zero to Hero

An increasing number of global corporations are adopting zero-based budgeting as a financial technique. In a zero-based budgeting process, all expenses in the organization are analyzed and justified each new reporting period. Every unit within the company starts from a “zero base,” and its costs must be associated with specific needs. The budget for each organizational function is set based on its future costs, regardless of costs in previous years. Companies that follow this strategy tend to create a culture of awareness about cost drivers, budget cuts and targets.

Read More at Global Finance Magazine >

Keep Supply Chain Finance Off the Balance Sheet

Improving cash flow is a constant challenge, and it is difficult to find an approach that doesn’t negatively impact a company’s financials. Unlike borrowing or factoring, supply chain finance transactions occur off-balance sheet. This makes them less susceptible to leverage ratio compliance concerns, and result in an improvement to these ratios. So, how do supply chain finance transactions avoid being classified as bank debt? It comes down to the structure of the program.

Read More at The Digitalist by SAP >