There is often a gap between the truth and the standard. This gap can be above the standard which is great if it’s a sales number but not good if it’s a cost number. The gap could be below budget which is bad if it’s a sales number and as long as you’re delivering the brand it’s good if it’s a cost number.
Eliminating the gap is essential for managers. For example, if a gap associated with labor cost is high then the manager’s focus is to create activities or make decisions to attack that gap with changes that will allow the gap to disappear. When the gap disappears, the cost is now in line with budget.
Great managers and leaders are masters at seeing the performance truth and masters at seeing what’s causing the gap between truth and budget. One art to management is to cut the gap while creating a healthy productive environment.