October 15, 2020

How Will 2021 Be Different?

What a year, right? So many reasons to pivot and adjust, reposition and reach into a space that you’ve possibly never had to. Things like a digital footprint have become the largest of all territories for most businesses to reside while your customers and clients consume services and products safely. Most businesses have reduced their staff size and/or have them working from home.

These unprecedented changes that came on quickly in 2020 have not only rattled the cages of status quo, but also have forced every CEO to dig deeper and make the time to turn every detail inside-out in their companies to ensure the journey is one that is stable and successful. 

So, where do you start? That’s a great question and we have a few suggestions to help you navigate each step, linking strategy to value.

One Step At A Time.

ONE: Projections and Reality

No doubt this year has been full of projecting scenarios and outcomes to avoid being caught off guard. Some of these projections became reality. It’s important to take a strong review of both sides that your company has experienced this year. Systematically examining how various strategic initiatives launched during the crisis have affected corporate performance such as revenue, pricing, sales volume, and competition is vital to clearly revealing what you projected and pivoted towards as it may not be the reality now. 

TWO: Reimagine the Zero

Zero based budgets are arguably traditional and balked at by many leaders as it requires an understanding of critical drivers of business. Much of the argument to use this approach has evaporated as now more than ever, leaders are being asked how much and where to spend. Conducting a rigorous review of spending in key areas will establish a baseline to posture prioritizing the where and how of budget dollars. 

THREE: Hold Back

Typically, most companies budget on a fixed year, but due to the crisis this year, most companies have had to remain flexible and shift resources just to survive. To monitor the situation in real-time, things like spending control towers have been deployed using different KPIs than normal to measure. To hold back portions of budgets under a go or no-go scenario has been an approach that has helped to navigate the ebb and flow of budgets effectively and one that should stay in place moving into 2021.

FOUR: Reactive vs Proactive

Being remote has altered teams and the way in which we work. We’ve all been working in a more reactive manner than as a proactive one. Staffers typically not involved in certain areas of the company have been pulled in as a reaction to the crisis of 2020. Some of this has become almost a restructure in some cases and not one that has a strong utilization of employee’s time. As you look ahead, look back first on how your team(s) have changed and find online tools that will assist you with bringing your company from the reactive status to proactive. Proactive is profitable.

FIVE: Rethink Decision Making

The lens has changed. CFOs will need to explain why the standard budgeting process is, in many respects, moot and how, for 2021 and beyond, finance teams will be focused on options, agile reinvestment, and so on. To make changes to daily business operations, finance leaders will also need to link their operational KPIs with strategic plans and provide real-time data about the effect of the COVID-19 crisis on their company.

It Doesn’t Have To Be A Challenge.

These are just a few of many suggestions to get you started on preparing for 2021 budgeting. We know there are so many variables; some you’ve not had to even think about since your start-up years. It doesn’t have to be as challenging as it may seem.
Junction Peak offers resources, knowledge, and direction to guide you through understanding what your financial numbers are telling you and assist you with preparing your budget for 2021. To get started on your path to success, send us a message and we’ll get back to you right away.

About us

Junction Peak is your finance and leadership consulting team. We use accurate financial forecasts and proven tools to help you grow. 

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