Today, number-crunching and suave excel presentations aren't the only departments where famous financial leaders and CFOs excel. Business budgeting needs have evolved immensely in the wake of the pandemic, which means that finance leaders need to add value beyond just the numbers and metrics they propose. As per a recent McKinsey survey, 43% of surveyed CFOs strongly believe that there is a need to streamline the budgeting process for more speed and efficiency.
The business-as-usual budgeting process will not be sufficient to deliver a balanced budget and efficient projections in 2022 and beyond. One must tap into the manager within to change the budgeting game and drive success. In doing so, top financial leaders in India have provided us with an effective solution to the problem: approaching budgeting with leadership principles.
Budget management and leadership
With budgets of most companies up in the air, this is an excellent opportunity for those at the top to embrace their role as strategic partners. This is especially true for financial leaders who must learn to trust their instincts and establish trust within the team and customers regarding the budgeting process and outcome.
Additionally, every finance leader must also strive for transparency in budget decision-making. Ensuring that it is fair and letting everyone voice their inputs goes a long way to steadying the budget ship and delivering improved growth, enhanced decision making, and more efficient processes in a time of uncertainty.
Next, let's take a look at some of the ways you can follow in the footsteps of top finance personalities in India to give your budgeting a leadership edge.
1. Use communication to establish trust
Open communication channels with your customers and employees to gauge their thinking and behaviour and consequently allay their fears over budgeting. Is there a shift in customer behaviour or needs that necessitate spending more resources on a particular product or service? Let the people know that you hear them and do your best budgeting through clear, conscious communication. Want to establish that you have the welfare of both the brand and the employees in mind while preparing your budget? Let your team hear it out.
2. Stand by the principles of fairness and transparency
A true finance leader has the sensibility of knowing how to optimise the budget to address the most pressing challenges, if not all. Despite knowing the needs and wants of everyone, from the consumers to the employees, it is not always possible to satisfy them all with the resources in hand. Here, a leader should marry communication and consultation with a reasonable amount of fairness and transparency so that you can tell your stakeholders that your business holds their best interests at heart and is trying its best to create the optimum budget.
Budget management and fairness work hand in hand so that no budget beneficiary feels left behind. The beneficiaries are also more likely to accept your reasoning for any inevitable budget cuts because you have been fair and transparent in the process.
3. Give your employees' decision ownership
Lastly, let all stakeholders have some say in the budgeting process. This fits in seamlessly with the previously listed tips of communication and fairness. As a leader, you can either give the stakeholders free rein to decide the budgets that concern their area since they are more attuned to certain challenges and needs, or carry out a collaborative session where everyone works on it together. Either way, it is essential to ensure decision ownership.
Conclusion
Famous financial leaders worldwide have stood the test of time, thanks to their leadership principles, guiding them through budgeting in times of crisis. For many, budgeting in a strenuous environment can become overwhelming. But the principles of open communication exchange, fairness, transparency, and providing ownership can yield some great insights, data, and ideas to optimise the budget and ensure the success of a business.
In times of crisis, financial leaders must step out of their number-crunching zone and steady the ship of budgeting with strong, value-based leadership. After all, all the projections and analysis in budget reports are not enough to account for any budgeting constraints to various stakeholders. This is where famous financial leaders in India and abroad have often adopted the principles of open communication to build trust, established a fair and transparent process, and involved all stakeholders to have a say in the budget – all to great success. This blog outlines these ideas on how business heads can use budgeting and leadership to drive long-term success.
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