What would good budgets be like in HA2.0?

Budgets and budgetary systems – what should they look like? I’m thinking less about the absolute numbers, more about the behavioural aspects. It’s a subject I’ll come back to I’m sure, but for the moment, three thoughts:

1. Tackle the March Madness. Y’know, that “use it or loose it thing”. l’m sure we’d all swear blind it doesn’t happen in our own organisations… but I’m pretty sure it does. I used to manage a business that sold annual recruitment advertising subscriptions to the public sector and HAs – and good old March month 12 was a bumper – that single month accounted for over half our turnover… So, what can be done? The best solution I’ve heard of was via @Reinikainen – the good folks at Monmouthshire CC invoked an antidote to March Madness… All budget holders to contribute their budget underspends to an innovation fund that to be carried over to the new year, and used to do something new and good. I’ve not got the details to hand, but hoping that Esko might point us in the direction of a proper description.

2. Sort out a mechanism whereby the benefit for the organisation outweighs the Ego of budget holder. Without it, a increase in budget A, that results in a bigger cost reduction in budget B, will get lost in the annual bun fight.

3. Remember a budget is simply a plan. It doesn’t mean it’s right. Or wrong. It’s our best estimate of what resources we need to deliver the objectives for the year. Just because somethings been budgeted for, doesn’t mean we should spend it. Or vice versa. Attention needs to be paid to the budget for sure, but that shouldn’t be the limit of our attention. Guard against behaviours that reinforce the budget as the final word.

What else? What makes for good budget behaviours in the HA of the future?

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