It is sandbagging time again – are you ready?

– The average reading time for this post is 4 minutes –

SandbaggingIt is November and you are most likely struggling with the budgets and the plans for 2016 (if your fiscal year is the calendar year).

When I became sales manager the first time in 1982 and had to go through my first budget process I was very fortunate having a brilliant mentor who helped me understand some crucial premises, that I will now share with you. This post is about planning and budgetting in the mature corporate environment. I will address the issues in startups and smaller companies in later posts.

What is success?

Success is delivering on our budget again and again. Never come short and never come too high. Stay within the 101-105%. If we come in too low we will be punished and may lose our job. If we come in too high our superiors will be suspicious that we have sandbagged and they will just add on top for the following period, making our lives increasingly more miserable.

In sales success is not associated with anything else than meeting our budget and other fiscal targets. Whether we increase or lose market share is not an issue. As long as we deliver on our numbers we will be forgiven almost anything else.

Success is delivering on our budget again and again. Never come short and never come too high. Stay within the 101-105%.

When is success secured?

Success is secured when we negotiate the budget. The lower the revenue budget and the higher the expense budget we can negotiate the better are our chances of success. The fact is that our options for changing much in the market place in a single budget period are slim. Getting a low revenue and a high expense budget is our best insurance for success.

Success is secured when we negotiate the budget.

Write a plan

The budget is numbers in a spreadsheet. They do not tell how we are going to make them and under which assumptions they have been made. We need to carefully consider what we must do to deliver the numbers and we must write it down with all the details. Whenever someone pushes us for higher numbers or wants to cut our expenses we take out our plan and revisit our assumptions. First we fight to avoid the increase/decrease, then we ask for proportional adjustments if we believe that the adjusted targets are achievable.

Be prepared to walk away

Getting and accepting a budget that we do not believe is achievable is like getting the kiss of death. If we meet or over perform we have just proved that we were sandbagging in the first place. If we miss the budget then we will be punished.

Accepting a budget we don’t believe in brings us in to a psychological mode of proving we were right. Any option of proving that we cannot deliver will be used in a self-destructive approach towards failure. As a manager in the corporate environment we must always be prepared to walk away. There is nothing wrong with leaving due to disagreements over the budget. It’s actually much better than being fired for under-performing.

About Hans Peter Bech

Hans Peter Bech is an Amazon bestselling author. He is a frequent blogger on issues related to growing software driven companies to global market leadership and has written several books and numerous whitepapers on business development in the software industry. Hans Peter also facilitates workshops for commercial professionals in the TBK Academy® and is an advisor for governments and private companies. Hans Peter holds a M.Sc. in macroeconomics and political science from the University of Copenhagen.
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