Own Your Budget - How “budget bad news” can be your friend
It was John’s turn to provide a budget update…
“After the first 3 months of the year, we are overspent compared to budget. We believe it was something we missed. And at this stage, we don’t have a plan to recover it.”
Does this sound familiar?
One of the most challenging things that budget owners have to do is share bad news. And the challenge has to do with how we are wired as humans.
Research shows that we all have a tendency to overweigh losses when compared to wins. Psychologist and Author Daniel Kahneman calls it “loss aversion”. We don’t want to lose or fail.
As budget owners, we need to be able to change our mindset when it comes to sharing bad news.
Don’t avoid it. Welcome it. Like you would when getting to know someone. Who becomes a friend.
If you are not reporting your budget “bad news”, you are missing out on opportunities to identify:
Inefficiencies
Waste
Overspending
And the cost keeps adding up with every month that passes by.
Sharing bad news is the first step to making things better.
Think of it as an early detection system. It’s like the fuel warning light in your car. As soon as it flashes on your dashboard, you start planning a fuel stop. You don’t avoid it. You welcome it.
Ultimately, sharing your budget “bad news” will help you change the budget conversations you are having.
“Who can help John?”
Greater transparency can bring together teams and departments. To solve problems together.
How would I know?
In a past life, I was known as “bad news Bihar”
Own your budget so it doesn’t own you.
PS: Are you ready to start owning your budget? Let’s have a chat
One sporting stat
Was the NRL launch in Las Vegas last weekend a success? Whilst the American TV ratings were low, the two matches were the most watched league games ever on Fox Sports here in Australia.
The NRL has a 5-year-deal with Las Vegas, so it may be too early to tell.