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A Planning, Budgeting, and Performance Measurement Template

Planning, budgeting, and performance measurement transform strategy into action.  They complete the strategic process of goal setting, strategy formulation, and implementation.   Goals and strategy are the products of strategic thinking.  The products of planning are objectives, timetables, budgets, and a baseline to measure and analyze performance.   This template guides you through the process of planning, budgeting, and performance measurement and provides a format to record the goals and strategy from your strategic thinking process and the objectives, work assignments, and budgets from your planning activity

Three Sigma has models on this website to help you think and plan strategically.   Examine Your Business Theory can help you examine your fundamental business assumptions.  Making Your Mission Operational can help you define your purpose, vision, goals, and barriers to goal achievement.  A Competitive Strategy Model can help you define and formulate your competitive strategy. 

This model is presented in a condensed format to make it easy to read and copy.  It was constructed using Microsoft Word 2000.  It can be downloaded or copied from this screen and pasted in any folder that can recognize Word.  The sections and tables can then be expanded to any size desired.  Contact Three Sigma for assistance if needed.

Download this Microsoft Word 2000 document right now as a self-extracting executable file (.exe), size 46k.

Vision and goals
State your organization's purpose and vision.  

List your goals and identify the barriers to achieving each of them.  Making Your Mission Operational presents a process for identifying barriers to goal achievement.





Since barriers describe root causes or system relationships they are relatively few in number.  A single barrier can obstruct multiple goals.  See Making Your Mission Operational for more details.

Objectives and Strategies
Objectives are the tasks that must be accomplished to achieve the organizationís goals.  They are specific and measurable.  Each objective should have a single individual accountable for accomplishing it and a timetable for its completion.   The nature of objectives and the performance standards they must meet are determined by the organizationís tactics and strategies.

The competitive strategy determines the objectives, timetable, and performance standards needed to position the organization in its competitive environment.  Its purpose is to attain a sustainable competitive advantage for the organization.  The competitive strategy defines the parameters for the marketing, financial and operating strategies.  Elements of the competitive strategy include:

  • Defining the nature and scope of the business.

  • Selection of the industry and markets in which to compete.

  • Strategic approach - offensive, defensive, or guerilla.

  • How it intends to respond to its industry and market competitive pressures.

  • Competitive approach Ė cost leadership or differentiation.

  • Market scope Ė broad markets or a market niche.

  • Marketing focus.

  • Desired size and market position.

  • Focus and method of growth- internally or by acquisition.

The marketing tactics and strategy determine the objectives, timetable, and performance standards needed to position the organization and its products and services in the mind of its customers and prospects.  Its purpose is to motivate these customers and prospects to select the organizationís products and services instead of a competitorís.  Its goal is to increase sales volume and revenues.  Elements of the marketing strategy include:

  • Customer identification and needs.

  • Market segments served and products offered in each.

  • Product and market priorities.

  • Product characteristics, packaging, and services.

  • Pricing objectives and methodology.

  • Distribution channels.

  • Advertising, sales promotion, and publicity.

The financial strategy determines the objectives, timetable, and performance standards needed to finance the organizationís operations.  Its goal is to provide sufficient capital to finance the organization's operations and minimize its cost of capital.  Elements of the financial strategy include:

  • Capital structure Ė amount of debt and equity desired

  • Managing the organizationís cost of capital

  • Determining profit requirements

  • Identifying and evaluating sources of capital

  • Arranging suitable long and short term financing

  • Investing surplus cash

Operating strategies determine the objectives, timetables, and performance standards required to produce the organization's products and services.  Elements of operating strategies include:

  • Production processes and control.

  • Purchasing and inventory management.

  • Supply chain management.

  • Training.

  • Human resources and organizational restructuring.

Objectives need to be set in all of these areas.  They describe and assign the work that must be accomplished to achieve the organizationís goals.  Additionally, all strategies should contain innovation objectives to keep these strategies from becoming obsolete.

Setting objectives begins the operational planning process.
Setting objectives is the critical step in implementing strategy.  Objectives describe the tasks that must be accomplished to achieve your goals.  They are driven by your strategy and must circumvent or overcome the barriers to goal achievement.  Objectives are the basis for work assignments and accountability.  Objectives are based on expectations that are informed guesses at best and depend on many factors that are beyond your control, so setting objectives more than 12 to 18 months into the future is usually unproductive.    

List each of your goals, the barriers to achieving that goal, and the objectives describing the work that must be accomplished or started in the next 12 to 18 months to accomplish that goal.

Goal                                    Barriers                                    Objectives


Three Sigma has a model on this website that can help you plan your work.  See Performance Measurement 101.

Work planning
Work planning consists of assigning objectives to responsible individuals for planning and accomplishment.  It may be necessary to sub-divide objectives into functional work-tasks so accountability can be assigned to a single individual.  Because the future is uncertain designing work in tasks of 12 months or less will make planning easier and provide the flexibility to adjust to unanticipated events.  Objectives should include a timetable for completion, budgets identifying direct resource needs, and the measurable performance standards required by your tactics and strategy.

Complete the following table for each objective.


into functional work tasks     
(if necessary)

Timetable for completion

Responsible individual


Critical performance standards





Balancing the plan and timetables
Review these actions and timetables to make sure they are consistent with each other, encompass all significant organizational activity, are within the organizationís capabilities, and have the commitment of those accountable for results.

The accountable individuals should identify the personnel, capital, and financial resources they will need to accomplish their objectives, and  prepare and defend the budgets that allocate these resources to them.  These budgets must be compiled and reviewed to ensure compatibility with your operating profit requirement.  

Balancing objectives
Objectives must be balanced against attainable profitability.  Profit planning is essential to ensure these objectives do not exceed the profitability with which the business can expect to operate.  A Profit Planning Model will show you how to determine your operating profit requirement.  Balancing objectives is the most critical activity in the planning process because it demands setting priorities.  Revenue and resource constraints will limit what the organization can reasonably expect to accomplish resulting in the need to downsize or postpone some of the desired objectives.  Setting priorities will ensure that the most essential objectives are accomplished. 

Examine this plan of action, timetables, budgets, and operating profit expectation to verify they are consistent with your competitive strategy and will lead to vision and goal achievement.

Performance measurement
Measuring performance, analyzing variances, and taking prompt corrective action will be necessary to achieve these results.  Performance Measurement 101 will show you how to develop a performance measurement process or you can contact Three Sigma for assistance.

Copyright 2002 Three Sigma, Inc.