Playing the budget game to win

Dear Bob ...

I submitted my budget the other day - the result of considerable research and modeling, which I fully documented in spreadsheet I provided.

Then the phone rang â€“ my boss and the finance guy were looking at my portion of a rolled up departmental budget. After several guesses, I went down to his office. That is when I discovered that no one had ever looked at the 2nd sheet where I documented my assumptions and research and had formulas tied to those assumptions. So I finally got them to tell me what the "realistic" number was and now I'm trying to figure out how to do what I am asked to do for that amount.

Any suggestions?

- Unrealistic

Dear Realistic ...

I presume mayhem is out of the question?

Welcome to the wonderful world of budgeting, also known as "Pin the Tail on the Donkey for Adults." The only question is, who gets to be the donkey, because the way the game is played they blindfold you, hand you the pin, and let you wander all over the place trying to find the right spot. When you don't, all they do is criticize you for failing to find the critter's backside.

What you should do depends on the type of budget you administer. A friend who was responsible for repairs once defended his spare parts budget this way: He said, "I gave you my number. Go ahead and put any number you want in the budget, and I'll spend whatever I need to spend to keep the computers up and running. If you think I'm wrong, it doesn't matter to me in the slightest."

"No, I want this to be your number," his boss replied.

"I gave you my number," my friend answered. "But please - submit any budget number you want."

That's an appropriate way of dealing with non-discretionary spending. If your budget covers discretionary spending, try this: "No problem - what I suggest we do is go over my planning assumptions together. If we need to spend less, let's figure out what you don't want me to do and we'll make the numbers come out where they need to come out."

It will take some persistence on your part, because your boss and the finance guy both are expecting that you're playing the other side of the game - the one where you artificially pad your budget on the assumption that it will get cut. They have no experience working with numbers that are grounded in evidence and logic, so you'll have to teach them how that game is played. The first step is persuading them to try playing it.

And the first step of the first step is to avoid being as sarcastic about it as I'm being here. Sarcasm is fun, but it's rarely persuasive. Ain't it a shame?

- Bob

Posted by Bob Lewis on September 19, 2006 06:19 AM

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At a previous job I tried the budget by logic path and was unsuccessful. All budgets were routinely cut by 1/3. So I joined the crowd and padded my budget by 1/3. Then the budgeteers came up with a new twist. They asked that we delay any spending until the second half of the year. When the second half of the year came around they stated that since we didn't need the money for the first half we could do without it for the second half. They eventually outsourced IT because the department could not accomplish anything.

Go figure.

Posted by: Kurt at September 19, 2006 12:53 PM

With regards to Karl's comment about the budget games he ran into, I'd have offered my sarcastic suggestion: Hand each of them a tablet of paper, pencil, and hauled the PC off their desk. They can use the old way for 6 months.

In all actuality, I'd always have project plans slated for all different times throughout the year. Also, there was always maintenance and license renewal costs that were ongoing and not targeted for the beginning or end of the 'fiscal' year or quarter. Keeping the ball rolling like this throuhout the year keeps the BS of budget games minimal. When it's done this way, you remind them that they are changing business processes. When they pull the plug on the AV software renewal budget, or the planned new servers, the outages will cost them more than doing it the planned way.

And foremost in the game, if a project's being canceled or delayed due to budgets, get it in writing/e-mail. Then let the people expecting to have their system running next month get on your side when it's delayed 7 months, not fighting you.

For the most part, if I had items that were approved, I spent it (wisely). I only gave a heads up to above if it was a sizeable amount, and it was agreed upon previously to do so.

Posted by: Rob at September 20, 2006 05:42 PM

I recently came across a new version of the game - a one time only play. The incoming IT director only took the job on the basis that the IT budget would be x% of the company turnover. Takes all the fun out of playing the game though.

Posted by: Orlando at September 21, 2006 12:52 AM

I don't mean to make light of Kurt's story, but I broke out laughing when I read it. Stories like this is why the cartoonist of Dilbert is never at a loss for material.

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Playing the budget game to win

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