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The Myth Of No Budget, A Corporate America Fairy Tale

Do any of these budget related phrases sound familiar?

  • There is no budget for any more travel this year.
  • There is no budget to give your employee a market pay increase.
  • There is no budget to provide lunch for the employees.
  • There is no budget to replace your laptop at this time.

We hear all the time in Corporate America that there is no budget to do this or do that, but I want to let you in on a little secret. There is almost always budget available. The reality is that the senior leader who is in charge of the budget, which is usually millions of dollars, is prioritizing how that budget is getting spent, and at this point in time, has not prioritized what you are asking for.  In many cases, they may not even know what you are asking for, as it may not have “bubbled up” to his or her level.

Because I know this little secret, I tend to get a bit feisty, when I hear anyone tell me there is no budget.

For example, earlier this year, one of my colleagues (have changed the facts slightly to maintain anonymity) was asked about a staffing gap in her organization and her response was something like, “We had put that staffing in the budget and it got cut. So, I have no budget to address that need”. Yes, it was unfortunate that that particular line item was cut, but the rest of her multi-million dollar budget was not. And, she had made deliberate decisions to post and fill other positions that she deemed were more important.  So, the more accurate response to this need would be “I prioritized what roles I wanted to fill and decided that other positions were more business critical for the following reasons…..”

Why am I surfacing this issue?

  1. Messaging Matters: As leaders, we should be careful in what language we use when employees ask us to make an expenditure or large investment. It is important for them to understand that there is a prioritization process that is used, and what other items may have ended up on the priority list. Conversely, we may also need to pause, reflect and then change our investment plans to fund something new that is more important.
  2. Small Money: As the budget owner, we need to consider whether the request is “small money” or an actual investment that will be hard to fund. For example, if we are managing a budget of $50 Million then $1,000 could be considered small money, and a few $100 could be considered coins we find at the bottom of our cough. Sometimes we need to simply approve the small money investments without overthinking them, if they are truly the right thing to do.
  3. Dual Advice: As an employee who has an expense request I have dual advice- “don’t always take no for an answer” but also “pick your battles”. If you believe that an investment should be made and there is a clear return on investment, take the time to make your case (document the facts etc) to your boss or the decision maker. If your boss does not want to approve it, and you feel that this is worth the fight, you may want to consider going higher up in the leadership chain for advice.
    • Conversely, if you have been told no already, you have to decide how important the investment is to you. In work life there will always be things that we don’t agree with and we can’t fight every battle. Sometimes we need to take no for an answer and move on.
  4. Ask The Right Person:  Whether you are a manager or employee looking for approval for an investment, be sure you are asking the right person. For example, if you are a hiring manager and you want to hire an external candidate above the budgeted range in the requisition and the HR Recruiter says no, you should stop and reflect. The HR Recruiter may be sharing the policy, but ultimately it is the business who makes the hiring decisions. In this case, you should discuss this further with your boss or your HR business partner, to possibly over-ride the decision. I am a huge fan of the HR function, and of having policies, but at times we have to rock the cradle to make sound business invesments.

With your help, we can crush the myth of “there is no budget” and make better investment decisions moving forward.

On a related note, I found this thought provoking article, “Should companies eliminate budgets?” The article starts with: “Companies that limit their spending based on outdated facts and figures may risk losing business to their competitors”. Love it! 

The No Budget Myth

The No Budget Myth: Image courtesy of Stuart Miles, freedigitalphotos.net