The Semco Style 5 Principles to transform the way we work
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Rollover Budgets Every Six Months

Long-term corporate budgeting is a joke

But uncontrolled variables are what make dreams come true. If we change the way work works we can live the dream of work-life balance and sustainability. – Ricardo Semler


In a Nutshell

Corporate budgeting is like astrology, predicting outcomes with certainty and prescribing ways to deal with events that are yet to materialize. And, managers are often so committed to their own forecasts that they’re willing to do whatever it takes to make them real – often at the cost of the company’s overall profits. In other words, corporate budgeting is that tedious mix of numbers, never-ending meetings and strained deliberations that drains valuable time and incentivizes corporate deceit.

When budgets are drawn based on long-term projections, it introduces into the equation multiple variables that nobody can control. More often than not, managers resort to lying and cheating so that they can set low targets and achieve results that therefore seem tremendous. When every executive approaches the budget with hidden agendas, the situation quickly devolves into people playing against each other. There’s rampant distrust and incentives meant to motivate performance get distorted, often risking the best interests of the company.

Which is why corporate budgeting in most companies is so rife with negativity that’s deeply embedded and the deceit is almost invisible because it’s viewed as being part of the process. It’s a game where cheating wins and honesty loses. But, it needn’t be such a tedious and depressing process: When corporate budgets focus on creating value and reinforcing a growth mindset, the process could be positive and stimulating, encouraging people to be proactive. But to do that, you need to rethink your budgeting process and maybe even turn it on it’s head.

 

 

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