Page 202 - Budgeting for Managers

Mastering the Budget Process
“Just Fix the Problem!” “What Problem?”
One of my company’s clients was a Fortune 100 investment
bank with a very conservative reputation.The senior execu-
tives insisted that they really wanted honest status reports and an
accurate report of problems from the lowest-level managers. 185
However, the overall attitude of management at all levels was “Don’t
allow any problems to happen! Fix them before you need to tell me
about them.” The result was that lower-level managers, not wanting to
face harsh criticism, would hide problems and try to fix them. But they
often didn’t have the money or authority to solve the problems.
I saw many of these difficulties when I trained lower- and middle-
level staff in management. I asked for examples of problems and, wow,
there were a lot of them! Major projects that the senior vice presi-
dents thought were going along just fine were spiraling toward disas-
ter. Ultimately, the bank was forced to merge with a much larger com-
pany and lose its autonomy.
at the departmental and supervisory levels. Executives have a
limited picture and miss many of the details. At the same time,
they must respond to pressures related to financial management,
strategic plan, and the interests of the owners or stockholders.
All too often, this makes it difficult for them to understand the
financial needs of departments and respond well to budgetary
requests from the bottom of the company.
If you want to get your budget approved, you’ll need to
understand the management structure of your company. What
are the barriers to vertical communication? That is, what keeps
your voice from being heard upstairs? What can you do to get
the message through? Also, what are the company’s attitudes
toward money and the control of money and business opera-
tions? Once you can answer these questions, you can find out
how to present the case for your budget. Keep these issues in
mind:

•What adds value to the company?
•Who makes the decision? How could you get access to
that person? What are that person’s biggest concerns?
•What are the issues that matter most to the company?