3 Approaches, Leaders Should Use, When Creating A Budget!

Many organizations, find – themselves, in the position, where they realize/ recognize, actions are needed, sooner, rather than later, but, appear challenged, because, their leaders, lack the knowledge, understanding, training, self – confidence, and/ or, abilities, to align the group’s spending priorities, with, with what’s needed, and affordable! Some make Draculian – cuts, which are, […]



Many organizations, find – themselves, in the position, where they realize/ recognize, actions are needed, sooner, rather than later, but, appear challenged, because, their leaders, lack the knowledge, understanding, training, self – confidence, and/ or, abilities, to align the group’s spending priorities, with, with what’s needed, and affordable! Some make Draculian – cuts, which are, basically, dramatic slashes, across – the – board, without considering, the best one, in terms of potential ramifications, in both, a relevant and sustainable manner! Others fail to pay, significant interest/ attention, and appear, to either, be, in – denial, or, procrastinate, when, proactive, well – considered, planning, is indicated and necessary! After, over four decades of personal involvement, in, nearly, everything, related to quality, effective leading, from identifying, and qualifying, to training, developing, and consulting to, thousands of actual, and/ or, potential leaders, as well, as serving, personally, as a leader, on a variety of occasions, I strongly, believe, creating a meaningful budget, is one of the best, tools, leaders should use, consistently! Unfortunately, we often, witness, too many, so – called, leaders, who, either, are unwilling, or unprepared, to pursue the finest, possible, approach, to creating and using a well – considered, budget. With, that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 3 approaches, to creating a budget.

1. Across – the – board: Making, across – the – board, changes, in a budget, is generally, a poor approach. Those, doing so, seem to seek, an easy solution, rather than pursuing a quality one! They decide to make cuts, in every area (which, is not contracted), rather than, evaluating, current, and probable – future needs, goals, and priorities! When, this is done, nearly, always, the organization suffers, because, certain areas, must be maintained (and, often, enhanced/ increased), to make the needed, changes, for the better!

2. Zero – based budget/ Bank for the buck: Although, it is often, indicated, and the best, most – thorough, approach, few groups, take advantage of preparing their budgets, using, zero – based, budgeting. That means, examining, every line – item, and evaluating, whether, it is providing the right amount of, bang – for – the – buck! When this method is done, correctly, the probability of knowing, where, either, less, more, and/ or, the same amount, may, be indicated! Unfortunately, too many, opt for a path of least resistance, and simply, adjust a previous period’s budget, by a certain percentage, etc!

3. Relevant/ sustainable: To use this document, and process, to the peak of its potential, it makes sense, to create something, which aligns, directly, with the strategic and action plans, of the particular organization (as long as, those, are done, properly, and thoroughly)! A group’s budget, must be considered, a quality leader’s friend, rather than, as a meaningful process (as, unfortunately, many so – called, leaders, do)! The purpose of this methodology, must be, discovering the best, most relevant, sustainable, paths, to pursue!

Are you prepared to create, and effectively use, budgeting, as it should be, to benefit the group’s immediate, intermediate, and longer – term needs, and interests? Are you, up to the tasks, and necessities?

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