Your budget is your promise. You rely on it to give you the infromation you need to make smart business decisions.
You need your team to support you in this endeavour and treat the budget and the budgeting process with the importance you do.
You may be thinking, “well, getting everyone involved in the budget sounds great and all, but good luck getting them to stick to the actual numbers when it is finalized.”
Creating a culture of budget accountability can be a challenge, but it is necessary to build a stronger business. If you routinely have departments going over budget or ignoring the planned numbers and skewing off in a completely different direction, it can really affect your company.
Accountability is more than taking the blame when something goes wrong. It is also about delivering on a commitment. If a manager says they will stick to an agreed-upon budget, being accountable means sticking to that budget, and not just apologizing when it goes over.
Some techniques that can help create a culture of accountability:
- Set clear expectations. Define the outcome you are looking for, how you will measure success, and how people should go about achieving the objective. This does not have to be top-down dictated, either. Making it a group conversation can help create buy-in.
- Make sure you are not setting the team up for failure. Before agreeing to a plan, know what skills are needed to pull it off, what resources will be needed, and if any delegation is required.
- Measure it. Setting smaller milestones can help stay on track. Clear targets are also good as they help team members know what they’re shooting for.
- Provide ongoing feedback. This can be fact-based and determined by the above steps. If you have clear expectations, a defined plan, and are measuring results, it will be easy to see where things are going off track.
- Create consequences – for both success and failure. People should be rewarded for meeting targets, and in some cases penalized for missing them. If a budget goal was not achieved because there was something off in the planning, that’s one thing. It can be a sign to repeat the planning process and look for ways to tighten it. But if the plan failed because of a lack of accountability, there might be other actions to take.
How do you keep your team on track and accountable after the budget is complete? What challenges do you have?