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 – 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