Change Management and

Financial Forecasting

1970 Datsun 1600

4.5 = XJ

12

Rowntree Profit by year $ million$4.25

$1.75$2.10

Pre Sales Tax 1983 1984

Rowntree Total Sales in Tonnes by Year

15,000

16,000

17,000

18,000

19,000

20,000

21,000

78 79 80 81 82 83 84 85 86 87 88

Year

Tonnes

Rowntree Market Share by Year

15.3% 15.3%

14.7%

15.8%16.2%

16.4%

1983 1984 1985 1986 1987 1988

Rowntree Profit by year $ million

$4.00

$1.75 $2.10

$4.10

$8.75

$12.10$13.80

Pre Tax 1983 1984 1985 1986 1987 1988

+

New Council November 2005

Mitchell, CEO 2005

FORECASTING 2005/06

Adopted Budget $249,000 Surplus

December Review $4,000 Surplus

March Est. Actual $362,000

Deficit

June Actual Result $993,000

Deficit

249

4

-362

-993

Adopted Dec Review March Est June Result

Mitchell 2005/06 Surplus Forecasts ($’000)

Year To Date Results

• Sept 2005 $2.8 Million Favourable

Variance on the YTD Budget

• Jan 2006 $4.5 Million on YTD

Budget

• March 2006 $410,000 on YTD

Budget

• June 2006 Final Result $630,000

WORSE Than Est. Act. Forecast

“Real leaders often create these

sorts of artificial crises rather than

waiting for something to happen.”

Page 46

Leading Change

John P. Kotter

Mitchell Acting CEO

REASONS FOR MONTHLY

FORECASTING

Managers should be looking at

financial results at least monthly

anyway

Check results while details fresh in

the memory

Catch tends and results quickly

giving time to react and correct

CHANGE MANAGEMENT

Senior Management lead

CHANGE MANAGEMENT

Senior Management lead

Not imposed by Finance - Not

Finance centric

Sir Humphrey – Yes Minister

CHANGE MANAGEMENT

Senior Management lead

Not imposed by Finance- Not

Finance centric

Real committee with results in 6

weeks

Mitchell General Manager Community & Recreation

CHANGE MANAGEMENT

Senior Management lead

Not imposed by Finance- Not Finance

centric

Real committee with results in 6 weeks

Committee lead by Community and

Recreation

Key players identified – Departments and

levels

Consult widely

COMMITTEE FINDINGS - FORECAST

GOALS

Simple to use

Managers are Lazy

COMMITTEE FINDINGS - FORECAST

GOALS

Simple to use

One stop shop

Same principals for all areas

Recognise different businesses

within council

Controllable and Uncontrollable

costs

Treat managers as Managers

Invoices

COMMITTEE FINDINGS - FORECAST

GOALS

Finance Dept. support

Embedded Journalist

COMMITTEE FINDINGS - FORECAST

GOALS

Finance Dept. support

Lever your Technology

KEY ACTIONS

Month end timing

Set Timetable for all involved

Under promise over deliver

Our Employees

Employee

Costs

39%Other

Costs

61%

Mitchell Shire Salary Cost Share - 2009

KEY ACTIONS

Salary Costs

Separate natural accounts – Straight

Salary, On costs

Budget/Forecast by position/individual

Is Leave Controllable?

Are On costs controllable?

Long Service Leave

Workers Compensation

Copyright: © Photograph by Margaret Monck

Maternity Leave

www.wollongong.youronlinecommunity.com.au/

4 SIMPLE FORECAST GOALS

1. Check Actual costs

2. Asses Year to Date variances

3. Provide a Year End Forecast

4. Comments on major variances

Variance on Mid Year

-793,000

-39,000

81,000-6,000

2006 2007 2008 2009

7.9% 7.8%7.0%

6.3%

2006 2007 2008 2009

Annual Leave Provision % of Salaries

Napoleon stated that the moment of

greatest danger was the instant

immediately after victory.

Psychological Effects of Combat

Dave Grossman

Arkansas State University

Practical Demonstration

Use ColourNeed to know to the left,

Nice to know to the right

One Stop Shop

Colour Variances, No signs

Separate out Income and Expenditure

Help is never far away

Change Management & Financial Forecasting