Budget: The Structural Flaw

[Now, these Notes From The Cube do not indicate Power, Prescience or Profound ability to change the course of events. The Cube is simply one of the few who can string a couple of sentences together, handle a spreadsheet beyond basic data entry, work a Gantt chart and convert them all into meaningful (meaningful?) reports -- hence, The Cube has supported annual Budget reviews for a few years now and has observed. Observed and observed. No one listens from below, so observation is the limit to The Cube's participation.]

The structural flaw in the Budget review: no one's in the same room at the same time.

Start: President gives a PowerPoint "Vision Plan" the last week of the 3rd quarter. Each Department is instructed to prepare its next year Budget by the 2nd week of the 4th quarter.

Observed: No instruction, direction, or scheduled time for the Departments to coordinate with one another or the President. The Budgets are prepared independently.

Step 2: President meets with each Department, alone, and asks them to explain their Budgets. He brings along one or two Financial people, not necessarily the same people the Departments were dealing with in prepping their Budgets. President and Financerios are seeing the Budget figures for the first time. No reference is made to the President's "Vision Plan" - now or evermore - but the President asks that the Department meet with another Department on line items 7, 14, 15 & 24; and perhaps with yet another Department on line items 3-6, 8-11 and 20-23; and so on. Financerios are instructed to go over the figures and report back to the President; no instruction, plan or inclination for them to talk to the Department on the Why of an item, only to make sure that the #s add up. Everybody due back in a week.

Observed: President gets a very seat-of-the-pants understanding of the line items. He may know a lot about some departments but, since no one can be an expert on everything (especially current President, brought in from outside the industry for his "management" skills and rolodex of contacts), this leaves the President vulnerable on the issues involved. A well-spoken Department head can breeze over questionable items, while a conscientious technogeek may be at a loss to explain a complicated-but-essential line item.

Step 3: Meet the President and the Chief Financial Officer. Cuts are made. Department heads are put in the position of justifying (or not) decisions made in coordination with another Department - but other Department is not represented at this meeting. CFO has not spoken with any of the Department heads about justifications; CFO sees only numbers and fiscal targets, as directed. (By whom? 'Never identified.)

Observed: We're down to the wire, and the Budget items that make it through are treated much like the salmon swimming upriver - survival of the luckiest.

CONCLUSION: Easy sarcasm aside, The Cube is still surprised over so many years at why no one has put all the key people together in one room and hashed out these short-range line item issues in coordination with the company's mid-range tactical plans and long-range strategic goals.

Oh sure, these same people get together regularly - but never with the same focus and facts/figures at-hand. Now they alternate supporting and competing against one another in isolated configurations of ad hoc assembly.

'Used to think this was a symptom of the old company ways: problems that a family-owned business faces when it grows larger than its roots. However, we've had professional management and organization for a few years now. This is their new structure, and it repeats the disconnects of earlier, albeit with a rhetoric that gives lip service to "communication," "interactivity" and "accountability."