You can view budgeting as a way to invest in trust – you’re empowering teams,communicating openly, and building in accountability. Some organizations need practice on this one, so here are a few ways to tell if your budgeting is falling short:
1) Too much smoke, too many mirrors: High-trust organizations craft budgets that reflect their priorities about spending time, money and energy. Without a budget that embodies values, what you say is just advertising. That can erode trust. A business that claims safety as one of its chief values, but then spends no money on it—ignoring workplace standards and failing to train employees on safety—creates mistrust along with a less safe workplace. It’s all talk and no show. Similarly, if you’ve emphasized work-life balance as an important priority, but your company is chronically under-staffed, the employees who pick up the slack will feel exploited and over-burdened. Your money and your mouth are entirely estranged.
2) Suffocating secrecy: When it comes to budgets, low-trust organizations guard them like they’re the formula for Coca Cola. That can deprive employees of something that’s valuable to them: a clear and credible expression of what’s important to the company. As an earlier post urged: don’t keep people in the dark. A secretive environment can hide or even encourage dysfunctional practices. A fear of transparency may cause departments to do things like refusing to share budget information with each other, shutting down the internal lines of communication and scrambling priorities.
3) Ostriches everywhere: Hiding budgets can be a sign that an organization has its head in the sand. Hiding is different from secrecy – it means leaders have permitted a culture in which people can get away with avoiding or obscuring problems. Those problems, of course, don’t disappear. Instead, they fester and intensify until they’re ready to erupt. By contrast, high-trust organizations deal openly with issues, especially conflict. Sure, they can shield information on salaries and bonuses. But if they’re a public company, that information for senior executives is out in the open anyway.
An easy way to avoid these pitfalls is to clearly set your company’s priorities before you sit down to write or revise your budget. That way, you have a solid guide to refer to when you’re ready to start focusing on the numbers. If your vision is murky before you set your budget, don’t be surprised to find employees confused and frustrated down the line—and not inclined to trust. But if you write a budget that serves as the embodiment of a carefully defined set of values, it can be a powerful way to express your company’s vision. That opens the door for efficient, empowering and trust-inspired leadership.