Although humorous, for most managers, this quote unfortunately has more elements of truth than we would care to acknowledge. When it comes to budgets, most managers are content with a Laissez-faire style of management. Why is there a disconnect in this role of management? Is it that frontline managers feel helpless and prefer to focus on the roles that feel they can control or influence?
Most front line managers often have very little input in the organizations budget process. It is usually passed down to the frontline from upper management. How often are frontline managers asked to submit even a raw calculation anticipated expenses? I would dare say much less often than they are asked to set lofty performance goals for their team.
Budgets need to be created and based in realistic expectations for the organization. It is easy to set lofty goals of performance in planning roles; however, it is much more difficult when you start budgeting staffing, equipment and financial resources. This may say more about our human nature than anything else. I have to admit, I am guilty of planning projects focusing more on the positive benefits and failing to account for the cost. I have found that I often overestimate my abilities and underestimate my resources. Knowing this about myself, reminds me to pay close attention to this weakness.
While budgeting and accounting does not have to be a managers forte, a basic understanding of your organizations budget and healthy respect for the role of budgeting, will help provide solid foundations for other roles of management. Budgeting is not all about finances. Consider all the staffing, equipment, and more importantly, time. All of these factors need to be addressed in the budgeting role.
The best place for the budget to be addressed and discussed is during planning sessions. When an idea or goal presents itself, it should be weighed in context of cost of reaching that goal. Nothing in business is free...even when you think it is. Every achievement comes at a cost to someone or department. This might be either a personal sacrifice of employees or a financial one for the company. Either way, knowing that cost up front will help prepare you during leadership and control roles of management and allow you to mitigate any obstacles to success.
Even if front line managers are not invited to participate in the behind closed door aspects, no manager should take the budgeting process and its impact on your ability to do your job lightly. In order for managers to effectively execute all of the fundamental roles of management, a strong appreciation for the budgeting process will be critical. Regardless of the management style that a manager functions best in, active engagement in the budgeting process will provide a solid foundation.
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