“If the ax is dull and its edge unsharpened, more strength is needed, but skill will bring success”
~ Ecclesiastes 10:10 (New King James Version)
The DeVoe School of Business has undertaken four significant case studies on the topic of virtuous business over the past two years. These case studies have shown that a business can be financially successful while doing good for society. One consistent theme that has surfaced among the four cases is that virtuous organizations have a different perspective on the use of budgets and strategic plans compared with many other organizations. In traditional business environments, the budget and the strategic planning process shape the organization’s short-term and strategic decision-making. In fact, budgets alone have often become an impediment to capitalizing on potentially significant opportunities in a rapidly changing marketplace and implanting beneficial change. Hence, we have applied the term “straitjacket” to the role that budgets too often play in organizations today. In many instances, budgets have become an excuse for leadership’s inability or unwillingness to transform their organizations, thus hamstringing them from “doing the right thing” for their stakeholders. How often have potential beneficial changes within organizations been undermined by the phrase, “It is not in the budget?” Unfortunately, budgets have routinely become sacrosanct or “immovable objects” within establishments.
The companies investigated by the DeVoe team have demonstrated that by treating their budgets and strategic plans as guidelines and not rigid impediments, they are consistently able to capitalize on opportunities that invariably surface in today’s changing world.
Based on the team-based case study research findings, additional general conclusions were drawn that may be indicative of other similarly-run organizations. Virtuous businesses
- Value the wisdom and insight of both the executives and their team members as they identify unique opportunities for extending their reach or significance.
- Demonstrate that their leadership is more accountable to their stakeholders than their budgets.
- Avoid the trap of becoming subservient to their budgets and, instead, focus on continual transformation of their organizations and creation of long-term growth and sustainability.
- Take advantage of opportunities which often were not included in their budgets.
- At times, make decisions that initially seem to be counter to a short-term budget-minded view but are consistent with their mission of doing the right thing.
As indicated in the Biblical passage above, leadership means doing the right thing and not just managing to a budget.