It’s the fourth quarter, which for many of us means it’s budget season. Everyone loves budget time, right? Probably not. Here are two things I like to remind my executive team, finance team, and leaders as we go through our budgets:
- All models are wrong, some are useful.
I discussed this in a previous blog, Measuring with Models, and it really holds true during budget season. One trap you want to avoid is getting wound up on every number, new hire, or expense right down to the dollar. Don’t forget that most budgets are outdated after the first month. Does that mean they’re not useful? Of course not! You need budgets to know what you’re aiming for, and then you know where to put your time, money and resources. They’re not going to be exact, but they’ll be directionally accurate, and you can pivot as you go.
- Focus on improvement.
Don’t focus so much on the end result. Instead, focus on the process of getting better. Think about your major initiatives, where you are investing, the expected return and what you are doing to improve. Focusing on the process of improvement adds perspective to the budget season.
Next time you feel wound up, step back and remember that all budgets are wrong but useful and focus on improving every year. Enjoy your budget season!