Budgeting: ‘Incrementalism’ vs. ‘Quantum Leaps’

Monday, 22 November 2010 01:39 - - {{hitsCtrl.values.hits}}

Most companies and countries tend to approach their budgeting process on an incremental basis, compared to the previous year– an approach we at MTI call ‘Incrementalism’. This works well in mature markets. Few countries and companies really get an entirely new ‘lease of life’. Sri Lanka Inc. now has that great opportunity and in such scenarios ‘Incrementalism’ has limited appeal.

Instead, the approach needs to be a ‘Ground Zero’ based ‘Quantum Thinking’ one. Some of the key questions we need to ask ourselves are: What do the world markets need? Whom are we competing with? What domains will we focus on? What is our competitive advantage? How will we develop our supply chain, especially our human capital? How will the economic benefits translate to the ‘bottom of the pyramid’? The greatest achievements of any country or company starts with a solid strategic plan, which then gets manifested in the budgets and diligently tracked.