Is Your Budget Full of Cuts or Investments?

It was that day again in March for all of us Brits. What joys will be delivered by the Chancellor of the Exchequer as he announces his budget for another year? Will it be helpful to your business, or will it make it harder to succeed?

But when it comes to your annual budgets, how are initiatives based around improving the experience greeted by your executives? Do you see strong support for investment in areas of customer & employee experience? Or is it all too often a fight to keep those things in the budget you are dying to do to improve the business?

I’m sure many of you will be going through this scenario at some stage in the year. Well we can’t promise to remove groundhog day from your process, but we can give you some tips to make it easier to get supporters of your plans!

 

Pre Budget

The best advice I have seen a return on when it comes to preparing for a budget is to know your audience! Take the time to discuss the influencers and stakeholders to see where their focus is for the coming year, maybe even 3 years if it is relevant.

Having a coffee or lunch with each of your key parties in the budget process is not just good for this exercise, but its a key thing you should be doing anyway to build relationships. Knowing what initiatives they are looking to drive, enables you to have those front and centre when preparing your own initiatives. It also gives you a chance to see what they don’t want to do and test a few statements around concepts to gauge reaction before you put hard work into them.

I then take some time to scope out the initiatives I’d like to drive in the coming budget period. Flesh out the costs, benefits and the risks of each of the initiatives, highlighting what can be achieved by doing them. Remember to include any dependencies of delivering initiatives you know key stakeholders will be pitching for in their sections. This way you are able to show support to their plans whilst also protecting your ability to deliver. Consider the indirect outcomes of your plans, clearly showing the ROI with proven methods and examples (See our ‘Distinguished Dozen‘ for some examples to use). It may be that by introducing the initiative in one area you are able to save cost in another. Directly paying for the initiative in a cost neutral introduction.

Finally, I would prioritise your wish list! Unless you are extremely lucky it is likely that you will not get all of your initiatives approved. So make sure you put into order the ones you want to ensure get supported. Delivering benefits to others plans where possible tends to work (Work those politics – No pun intended)! Be prepared to give some up along the way. The old saying of knowing which battles to pick could never be more true than at budget time! Go in prepared knowing you have the best chance of success with the preparation you have done.

 

Budget Review 

This really depends on the format so it is difficult to predict how you can deliver this for all scenarios. However, there are a few simple bullets that are worth noting as key strategies to remember:

  1. Keep Calm
  2. Don’t attack anyone in the process!
  3. Remember you have come in prepared to flex a little
  4. Outline the impact of everything that is approved and….
  5. The consequences of not doing initiatives that are dropped
  6. Take your own notes

Negotiation and presentation will always be a factor at budget review. So make sure you present yourself well. Show how you are prepared. Explain your cases well and outline the impact of the decisions both positive and negative. Try and do this without any emotional connection too. I’m not saying you shouldn’t inject your personality, but grabbing someone’s tie whilst yelling “Do you know how much time I’ve been preparing to do this!” probably isn’t the way to convince someone its the wrong decision! Make sure you take your own notes too; you’ll need them in the next section!

 

Post Review

Once all is signed, sealed and delivered you need to embrace and support the budget. However, I have found over the years a few tactics to remain in control (and sane) in the following 12 months!

I prepare a document that shows the various versions of the budget as it has been discussed. With all decision points mapped out with the impact on costs and deliverables. I then send this to all stakeholder parties who are affected by your division. This way you can clearly see the dependencies of delivering in future discussions. Trust me, its all too easy for stakeholders to ‘forget’ the dependencies when you are being asked to deliver a stretch result later in the year!

Then it is a case of delivering what you have agreed. Don’t carry around any luggage of the history of the process. Moaning about what you didn’t get or throwing that in front of peoples faces during the year won’t help to build those relationships. If you deliver a strong result that produces the results you promised, or even more than expected, you might even get support to introduce those gifts that you let go of in the budget process!

A wise mentor once told me that if you ask for something and then deliver what you said you would, next time you ask the answer is more than likely going to be yes! When you always deliver the goods, chances are you always get the funds!

Until next time, keep loving your audiences!

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