There are three parts to communication. There’s the telling part, which is often done through email or phone call. Sending the message. Then there’s the receiving part – the person actually read the email or reviewed the document or listened to the voicemail, whatever. These two parts are easy compared to the last part. In order for communication to be effective, not only must the message be delivered and received – it needs to be understood. And this is where communication typically breaks down, especially in the budget cycle. Nine times out of ten the reason why we hear “That’s not my number” is because there wasn’t a mutual understanding of what was being communicated.
Here’s what happens. You send out templates to department managers. Do they really understand what they’re looking at? Do they really understand what to do with them or what it is you want back? Are the accounts on there even relevant to them? At some point they send that template back to you. Now these managers <think> that because they sent the template back to you, you now understand their business plan. But you don’t. How could you? You don’t have their assumptions, you don’t know what is in their head, all you have are the numbers.
But an even worse situation, and some of you will fall into this trap – is when you don’t even let your business users TOUCH the budget template or they REFUSE to touch it. This really compounds the problem because now you’re trying to interpret their business requirements and get ’em into a budget template — there are a thousand opportunities for miscommunication and misunderstandings.
So it’s easy to see how communication can break down in the budget process, not so much in the sending and receiving part, but in the mutual understanding. And who gets the blame for that? It doesn’t matter who’s at fault. If someone says “That’s not my number” it’s Finance that gets blamed for the breakdown in communication. We’ve all been there. All eyes in the room turn to you to explain it. More often than not, there simply isn’t a good answer. This isn’t all theory for me. That’s the part of budgeting that drove crazy when I ran the budget process for business units at Pepsi and Reader’s Digest.
And it’s probably because of that personal experience, that at XLerant we believe you should never have to hear “That’s not My number.”
If you have a story around communication with non-finance execs, especially around the budget cycle, I’s love to hear them!