Forecast Is Not Target Is Not Budget
Separate target, budget, and forecast so leaders stop making the wrong comparison.
The mature finance move is not better arithmetic. It is cleaner meaning. Target A target is a performance ambition. It tells the business what outcome leadership is trying to achieve. Targets can stretch. They can motivate. They can influence compensation. But they are not supposed to be the neutral estimate of what will happen. Budget A budget is an authorization and resource-allocation tool. It says what spend, hiring, and operating assumptions the company approved at a point in time. A budget can stay fixed longer than a forecast because the point is governance, not constant restatement. Forecast A forecast is…
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