I bet it’s frustrating working in a large organisation and to keep hearing about “test & learn” or “fail fast” or “agile management” when management behaviour contradicts the words. If recent history is any indicator of the future, companies will continue to struggle in any migration to such flexibility and leniency. And ongoing shareholder pressure surely won’t help.
Budgeting for Test & Learn
I remember well the challenges of budgeting out the year ahead in the autumn, well before the year had ended. It always seemed like an exercise in wishful-thinking theory. And if that was the case ten years ago when I last ran the budget gauntlet, the exercise is distinctly harder now. Not only has the pace of change increased, but the amount of exogenous factors — such as a cyber hack, a leaked memo or massive change in market conditions — seems to have mushroomed. ON TOP OF THAT, companies are preaching that experimentation and failure is right and proper. So, how does one budget for that?Tweet This
I wonder how many CFO’s have developed a specific line that, in fact, means test, fail & learn. Where is the padding in the budget for making mistakes, failing and trying again? My guess is that most of the test & learn mantra is applied to testing the patience of management and shareholders, more than being applied to making great products and services for the customer. Company culture just doesn’t change overnight. Beyond demonstrating that such a Test&Learn attitude is carried at the highest levels of the hierarchy, it takes putting provisions in the Goals & Objectives, end of year interviews and, perhaps even, somewhere in the financial P&L, too.Tweet This