It’s that time. Organizations are reviewing budgets for the year ahead. While everyone hopes these meetings are smart, strategic, and have a meaningful impact on the business, that rarely seems to be the case.
12 Reasons Budget Meetings Aren’t Strategic
Too often, budget meetings aren’t strategic. From personal experience, these twelve reasons all contribute to the disconnect:
- The meetings are adversarial, as if the people inside the company are trying to rip off the company by requesting money to run it.
- The focus is only on numbers, without any stories of success and aspirations for what the dollars are expected to do.
- They are handled out of context strategically, looking at the business by department instead of by initiative.
- General managers and non-financial executives are placed in unfamiliar and poorly-performed accounting roles.
- Budget meetings are not integrated with strategic planning and business strategy.
- Accounting and finance act as if they control the business and are integral to generating revenue and profit.
- Budget meetings solve for numbers and do not solve for business results.
- They prioritize overly precise discussions about inconsequential aspects of the business.
- Budget meeting length isn’t matched to the strategic complexity or importance of the area.
- They are awkward and challenging to prepare for to ensure they are as productive as possible.
- Since they only happen once a year, the formats and discussions are unfamiliar.
- Preparing for them creates an organizational drag on getting things done to drive the business forward.
Because of these factors, business and department leaders often focus on escaping budget meetings with some semblance of a budget that makes sense. This behavior obscures looking at their areas and the entire organization strategically, comprehensively, and with a smart investment perspective.
3 Ways to Fix Budget Meetings
Download our FREE eBook, 3 Ways to Turn Budget Meetings into Strategic Activities. In it, we share actionable ideas for turning tactical accounting reviews into strategic conversations balancing business results with the financial underpinning necessary to achieve them.