Do Budget Hardliners Kill Innovation?

 

Sometimes, I reread books that impress me with straight-forward, example-packed discourse on business innovation. Guy Kawasaki's Rules for Revolutionaries is one on my nightstand--again.

In Rules, innovation evangelist and thought leader Kawasaki serves up ten possible "death magnets," or deal killers to opportunities. Death magnets are basically mindsets or business processes that restrict intrapreneurs from making products and services better.

The one that resonates with me at this reading is Kawasaki's Death Magnet #8: The budget is king. Here's why.

How many times have you heard this from managers or colleagues when you pitch an idea that may lead to improving systems or the bottom line?

"No way. It won't happen. We don't have the budget."

This kind of feedback has been a hair shirt for many innovative thinkers to endure in corporate settings. Especially in times like these.

This is what Kawasaki refers to when "the budget is king" syndrome rules. He hears budget hardliner-speak as "knee-jerk reactions" to great ideas that may result in cost overruns--for the short term; ideas that may reap big rewards if the investment was matched with the intrapreneur's well-thought idea.

In reality, no budget is set in stone. The budget, just like the corporate strategic plan, has to be flexible in order to allow the company to experiment with new ways of thinking and business execution. "The Budget" is an organic plan. It sets guidelines for future expenses based on past line item expenditures.

As a manager, I have to show some responsibility in keeping expenses in check. I know that if I come across a great opportunity that exceeds my allocated funds, I can do one of two things:
  • Go ahead and use non-allocated funds to support the opportunity, because I know my budget is flexible in other areas.
  • Present the idea to senior leaders and ask for supplemental money to make the idea come alive.
Senior executives usually set aside a certain percentage of the overall budget to be used as discretionary funds. At times, I've been able to convince the CFO that I need to tap into those funds when I see a rare opportunity that will garner increased support from customers, staff, and prospects.

What budget hardliners really imply. My question, which mirrors Kawasaki's conclusion, is this: Is it really the budget, or some underlying psychosis among the hardliners, that curtails curiosity and innovation?

Kawasaki writes that "the budget is king" attitude generally stems from "a lack of leadership, poor communication, and undue political infighting." So true.

Once on a location shoot, a photographer said to me, "Hey, I think we can really tell your story with a great shot if I can place your executives in a compelling location." I know what he really said was, "It's gonna cost more." But I also know that the end product will rock the socks off the executives when they see the final shot.

A budget hardliner would have said to the photographer, "Won't happen. It's not in the annual photography budget."

Through the years, I've developed trusted relationships with vendors. The photographer was comfortable with my asking him to explain the implication of his idea, and then give me a price range variance from what he originally proposed. I relayed that intelligent explanation, along with my assessment of his proposal, to my boss. I asked the boss's permission to proceed.

Because I invited my boss to comment (caution: this can be tricky if you have a tenuous or fragile relationship with your boss), he was thrilled at the idea and even added his own suggestions.

What resulted?
  • Instant executive buy-in resulting from open communication from photographer to manager to boss.
  • Empowered manager because her boss didn't use the budget as a threat to the project's improvement.
  • Amazing final product because the manager allowed the photographer to carry out his idea.
  • Engaged customers when they saw the company executives in an impressive image.
  • Increased sales and loyalty.
All for minimally exceeding the prescribed budget.

Can you get around the hardliners? Yes, in many cases you can. A solid, workable idea backed by supportive evidence--or even intelligent argument--may help you overcome strict budget carpers. Savvy intrapreneurs understand that budgets are guidelines, not intransigent rules.

Get support from managers and other advocates across the company for your idea. Perhaps customer research can give you an edge to dig deeper in company pockets. When intrapreneurs and business leaders are in synch, budgets undulate for the benefit of customers and corporate goals.

Do you have a "budget is king" story to tell? How did you overcome the mindset?

Karen A. Meek is a senior communications strategist. Follow her @karenmeektweets.