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Is Budgeting driven more by politics than by strategy?

A while back The Buttonwood Group and CFO Magazine conducted a reader survey on budgeting and planning and the results are disturbing to look at. I’d like to find out if these results would apply to your organization or not:

2/3 of readers surveyed said their planning process was driven more by Politics than by Strategy.

Now stop and think about that for a minute. Everyone knows there is bound to be some politicking involved in the budget process, but when people feel that politics drives their planning process more than strategy, they want nothing to do with it. They think it’s a waste of their time and it’s hard to argue that.

My second book was on the topic of politics and budgeting, so I know there’s a lot to it and we could do a whole webinar on the subject. But here’s the key thing — Politics fills a leadership vacuum. And that leadership vacuum is created when there isn’t a clear strategy and there’s no clear link between that strategy and the budget.

By the way, those were the top two reasons people cited for a lack of value in their planning process. The third reason cited was lack of individual accountability for results.

Now if you step back and look at these; they have very little to do with accounting or the nuts and bolts mechanics budgeting. At their heart, these are all communications issues. And these problems exist because we’ve taken our eye off the ball and turned the budget process into an accounting exercise rather than the communications vehicle it was always intended to be.

The bigger question of course is what can be done about it. And for that, we’re collecting stories from people to find out how they’ve overcome these issues and brought value to their planning/budgeting process.

What’s your story?


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