CEOs Concerned That Budgeting Not Aligned With Strategy


A recent survey from PricewaterhouseCoopers (PwC) has found that many Chief Executive Officers (CEOs) are concerned about the lack of alignment between their budgets and strategic planning.

The survey of 500 CEOs found that only 22 per cent described their budgeting attempts as being aligned with the company’s high-level planning. A further 65 per cent of those surveyed reported that they manage substantial business activity which is misaligned with company strategy.

At the same time, there is a real need for companies to delegate more resources towards important initiatives. The study revealed that three-quarters of respondents feel that lower-priority projects were receiving too much funding, while high-value projects aren’t getting enough.

For companies looking to improve their internal processes, there are a few key steps that can help with this process. Investing in strategy planning software can ensure that managers and senior executives are aware of the company’s most important projects and are assigning resources appropriately.

PwC also recommended that business leaders focus on the skills and capabilities that will make them industry leaders in their field. Keeping this strategic goal at the centre of cost cutting exercises is essential for achieving a sound result.

Other key findings from the survey suggested that many companies are struggling to effectively reduce their expenses. In fact, a quarter of respondents described their company as implementing cost cutting across the board, rather than strategically targeting areas that could be improved upon.

Another 48 per cent said their efforts to cut costs were not driven by an internal desire to operate more efficiently, but were reactions to external shocks. By treating cost cutting as an unusual occurrence in extreme circumstances, rather than a natural part of a company’s strategies, these firms are unlikely to be working at their most efficient.