Before I begin, a quick storytime –

Immediately after I graduated from school, I started working as a junior consultant at Price Waterhouse (nowadays known as PwC). I was assigned to a World Bank project. One of the public institutions requested a loan from the World Bank. The bank put certain conditions in the deal to ensure the loan they gave would not be wasted. They wanted the consultancy firm to guide where the money would be spent on administrative and technical issues.

The team I worked for was responsible for structuring the organization and the accounting department. The public institution side was looking at this project from the perspective of “let them finish their job, just give the money and go”. In their eyes, we were in the position of “a process that must be endured before getting the money”.

I witnessed a particular moment between the Head of the Research, Planning & Coordination (RPC) Department, and the Expert Consultant.

The consultant managing the administrative part of the project team was a world-renowned “grandmaster”, or what we would today call a “guru” 🙂 . I was responsible for monitoring the interviews, translation, and publishing in Turkish and English.

I was constantly walking around with this guru, taking note of everything he said.

The guru wanted to learn the planning process of this public institution. The Head of the RPC Department immediately started to complain:

“The exchange rates are constantly changing … The inflation rate is uncertain … The prices of raw materials are variable … The public policies are unpredictable … Everything is so uncertain that we cannot plan.”

As a new graduate, these seemed to be true to me as well.

The guru said something that I never forgot years later.

“If everything is certain, there is no need to plan. Anyone who can flow with the stream doesn’t need to plan where to go. Planning is a tool to reduce uncertainty.”

I never forgot this, and neither should you!

Planning, if done right, is a tool to reduce uncertainty, not a process that must be endured once or twice a year.

He who fails to plan is planning to fail

I often remember two quotes from Winston Churchill

“Plans are of little importance, but planning is essential”

“He who fails to plan is planning to fail.”

I remember those phrases especially when I hear the phrase “We are a flexible company”. That is a sentence of those who constantly change their decisions due to a lack of planning.

Flexibility means examining market changes and making quick decisions to change strategy when necessary. If we have already set our goals correctly, we will not change them often, but we can use many tactics in the process.

Budget is not an end but a means. Do not confuse means with purpose. If there are new creative opportunities, don’t turn it down right away by saying “Not in the budget”.

When you are talking with your contractors, if you say “very urgent” or “asap” or “yesterday should have been over,” it is hard to say all, but you are probably guilty of most of it.

This article was originally posted on Wizardy Budgets