In the midst of Q4, corporate leaders are taking stock of their end-of-year budgeting concerns and determining cost allocation for the coming year. Here’s how accountability can make all the difference when it comes to effective budgeting for the new year.
Determining spending needs and developing a robust and realistic budget is crucial for every organization, from Q1 to Q4. This task can often feel overwhelming — especially near the tail end of the year when leaders need to evaluate how to close remaining budget gaps and forecast effectively for the new year.
How do you build a comprehensive budget that adheres to your overarching organizational vision while moving the needle on key objectives? You may be surprised to learn that good budgeting begins and ends with workplace accountability.
Establish Desired Results and Communicate Them Clearly
Our definition of culture is simple — it’s the way people think and act to get things done. As a leader, promoting the cultural growth of your organization should be top priority. That’s why effective budgeting demands, above all else, an evaluation of how your financial decision-making can support your broader vision for the company.
Companies with scattered, unclear, or disparate organizational objectives often fail to achieve organization-wide engagement and accountability for a simple reason: employees are confused about just what benchmarks they should be working toward. In fact, according to our Workplace Accountability Study, a staggering 85% of employees are not sure what their organization is trying to achieve.
As confusion thrives, accountability suffers. As such, it’s the responsibility of corporate leaders to establish three to five meaningful, measurable, and memorable topline objectives that all employees must work toward and that support the overall vision of the organization.
After you’ve established Key Results (the meaningful, measurable, and memorable topline organizational results that employees should be working towards), ensure every manager is actively reinforcing these results with his or her direct reports. This communication is particularly important: our research indicates that simplifying desired topline results in this way increases employee engagement, in turn fostering deeper personal investment and ownership for those Key Results.
Assess Gaps Between Resource Allocation and Performance
After effectively communicating the results that all employees need to take accountability to achieve, corporate leaders should assess existing gaps between resource allocation and performance. Identify which processes and expenditures are having a positive impact on performance, and which ones may be detracting from effective execution across each department.
These measurements are critical indicators of your organization’s culture. If your current budget is promoting high performance, it is also actively supporting a Culture Of Accountability® in the workplace, in which every employee takes ownership for the execution of Key Results. On the other hand, if you are funneling resources into initiatives that are failing to generate better performance, it’s likely that you are enabling large-scale lack of accountability in your workplace.
Unfortunately, most organizations are facing an accountability crisis. Our data indicates that more than 80% of employees struggle to hold others accountable. Gallup research reinforces these findings, revealing that just four in every ten employees believe that their manager effectively holds them accountable for their performance goals.
To take an accurate pulse on accountability within your organization, consider employing a tool like our Accountability Index. Designed around 16 evidence-based accountability best practices, the tool provides critical insights into employee attitudes, awareness, and alignment around desired results. These insights will equip you with valuable knowledge to address existing gaps between resource allocation and performance outcomes within your organization.
Shift Mindsets to Gain Employee Buy-in
After you’ve determined the performance gaps that exist, the next step is to shift employee mindsets to promote greater accountability for delivering on desired results. But how can leaders possibly hope to change the beliefs that their employees already hold?
The Results Pyramid® model suggests that an employee’s experiences shape their beliefs (and belief biases) — which in turn, drive their actions. While most organizations attempt to close performance gaps by focusing their energy and resources on the top two layers of the pyramid (actions and results), it is far more effective to tackle the bottom two layers first (experiences and beliefs).
This is where corporate leaders can begin to close performance gaps through smart budgeting. By allocating your budget to address existing organizational inefficiencies or stumbling blocks — and the underlying beliefs that create them — leaders can direct resources toward initiatives that will provide employees with better experiences that promote the needed beliefs and empower employees to take full ownership of desired Key Results.
Funnel Your Resources Towards Accountability-Boosting Initiatives
Once you’ve successfully shifted employee mindsets, you must align employees’ behavior with the organization’s Key Results. Implement new training initiatives and operational policies that support and drive the organization’s Key Results and focus on establishing a Culture Of Accountability in which employees actively hold themselves and others accountable for the success of the organization.
It’s been proven time and again that organizations that are deliberate about shaping and managing their culture outperform companies that do not. When executives succeed in shaping a highly accountable company culture, employees more consistently hit targets — and more of your budget is freed up for initiatives that support Key Results.
Want to know more? Watch my latest webinar on-demand, Create the Culture You Need to Succeed in the New Year where I discuss all this, budget strategies, and how to create a Culture Advantage
Master budget season this year by purposefully creating a Culture Of Accountability that guarantees employees at every level of the company are committed to achieving crucial Key Results. If you’re ready to identify critical performance gaps and implement our 16 proven accountability best practices, learn more about our transformative Accountability Index.