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3HagWay: Scrap your 12 month budget and start doing this instead

Shannon Byrne Susko shows how to change how you operate to win over your team and investors

Follow the leader

When Shannon Byrne Susko sold her data encryption platform Paradata, a good number of her team followed to help her set up her new financial technology company Subserveo.

Yet, by her own admission, her team at Paradata had spent the first years running hard without success, operating under Shannon’s “good idea, half-baked strategy” and a “wild-ass guess” without any clearly mapped-out plan.   
So, what changed to energise the team and make them follow their leader?

The 3HagWay centrepiece

It was the development of the 3HagWay, a framework that became a book, designed to appease frustrated investors by getting more clarity around Paradata’s direction.

The centrepiece of the 3HagWay is its extraordinary 36 month, month-over-month rolling forecast. 

Paradata’s team forecast how much cash (yes, cash) they wanted in the bank at the end of each month; month over month, for three years.
 
rolling forecast

Increased confidence

Shannon says this type of forecast usually terrifies leadership teams.

But, she says, it’s the gold leaders are looking for.

“How many times have you gotten halfway through the year and your budget was so far off you just kept changing it, or you just lived with it – and found it utterly demotivating. We want to avoid this outcome…by evolving the rolling forecast,” she writes in 3HagWay.  

The result was an increase in the leaders’ confidence by specifying exactly what was needed to reach their 3 year Highly Achievable Goal (the 3Hag).

 
Clarity and accountability

The leadership could now go to every board meeting totally clear on how they were going to achieve the fiscal goals, and be held accountable for those goals.

Here are a few things to keep in mind when making a 36 month, month-over-month, rolling forecast:
 
  • Your 12-month forecast gets created, approved, and locked in for the year;
  • Every month you review with the leadership team your approved forecast, and discuss where you are and what you need to adjust (Very important: You are adjusting your rolling forecast, not your approved forecast);
  • Each month you add another month at the end of the forecast, so there are always 36 months forecast at any given time, regardless of where you are at in the fiscal year.


Shannon points out the 36 month, month-over-month rolling forecast is a leadership team tool, not a finance team tool.   

"Most important, your team believes in it. Your team will make decisions and take actions every day to move toward it. They feel the momentum, and they see the endgame. That kind of confidence is contagious." 

 
Shannon Byrne Susko will describe how she saved her company, and created another from scratch, using the 3HAG way framework, at a livestream interview with The Growth Faculty on June 4 at 8.30 a.m. AEST.

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