HL stated his purpose as follows: letís pick one tangible activity that exists in all organization and discuss how differently or similarly it should/could be conducted if one were to pay full attention to the self-organizing properties of organizations. Consensus was quickly reached on the following topics: developing budgets and dealing with budget cuts. Stories were shared and the following observations emerged. The process of dealing with budget cuts cannot be separated from the process used to develop the budget in the first place. The process used for developing budgets is a reflection of the deeper values and organizational principles that exist in the organization. The same is true about budget cuts. DO develop budgets bottom up by involving everybody in the process. DO develop full ownership of budgets by the users. Train all as needed to be able to be full participants. DONíT let budget development be a job for the financial department. DONíT start with a target from the top to which the entire organization then responds. DO instead allow the process to be open to all possibilities as the programs and budgets are built up in an open way bottom up.
DO make as clear and explicit connection as possible between expenses and outcomes/deliverables. DO, if possible, develop simulation models that make it possible to examine the consequences of alternative budget levels. DO anticipate the possibility that budgets may have to be changed (in either direction) and be prepared with alternatives from the start. DO make the whole budget process and the budget themselves fully transparent for all participants. DO bring functional groups together at each level in the organization to discuss and decide together what are the needs and opportunities and what is the most productive allocation of resources across their respective functions. DONíT impose or allocated budget cuts; instead DO ask of each area what they can do and DO provide support and coaching as needed for each area to achieve the most expense reduction that makes sense for their area. DO recognize the consequences, if any, of budget cuts in a public and transparent way. DO modify deliverables as needed. DO pay exquisite attention to the emotional cost associated with budget decisions and make space for it to be expressed and honored. DO articulate what the role of the formal leader is when there is a painful budget period. DONíT let the number keepers take over the process. DO treat it as an essential management responsibility from beginning to end. DO pay attention that budgeting issues and processes cannot be separated from issues of trust, quality of relationships and freedom/control. DONíT play the usual budget games where each level pads their submission in the anticipation that the changes that the next level will make. This automatically breeds distrust and poisons the whole process. Instead tap into the passion and responsibility of participants by engaging them fully into an honest and transparent process where they are trusted to develop the best they can in terms of programs and associated budgets. Provide support as needed to help them achieve that.