Every year around this time, leaders enter into “Budget Preparation.” Just writing those words brings back memories of pain, torture and frustration! Some unknown person from head office or the top floor in the building would send out guidance to leaders about this year’s approach. It always goes like this…
“For the upcoming fiscal year, we are looking to grow revenues by 12% and “optimize” costs by 5%.”
In other words: “Do more with less.”
It is a fact of life though. On the growth side, if you are not growing, you are dying. On the cost side, there is usually more going on than the obvious about shareholders wanting more return. There could very well be a significant need to spend more capital, to boost production, to equip the organization to move into new markets or to repair aging infrastructure. Sadly though, most senior leaders do not spend the time to explain this.
So… as a leader responsible for making it happen, what do you do?!
My approach has always been: make sure my team knows exactly what to do. Often I will ask the team to help me come up with up with a plan. I remember one dream team I was working with in the mid-2000’s, when asked to help me solve the problem of doing more with less, they came up with 31 ideas that when executed, saved even more money than the original request from way on up high. In fact, they came up with a better plan than a team of Ph.D. consultants from the Boston Consulting did.
Trust your team to help you figure it. And… The best news of all is that your team will have ownership and engagement around the plan to trim costs than if you came up with it yourself.
Remember each one of your team members are CEO’s and COO’s of a very important business I call “Life.” They run their own homes and when they need money to fix the house or buy a new appliance (Capital Expenditures) they find a way to trim expenses to pay for it. If they decide to go on a vacation somewhere far off, they save money for it.
