Reuters: Small Business News: Challenge the budget status quo

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Challenge the budget status quo Jun 20th 2012, 14:44 Tweet Share this Email Print Related News When the unexpected happens, act Tue, Jun 19 2012 How to nurture emerging leaders Fri, Jun 15 2012 Management Tip of the Day: Curate your personal job feed Thu, Jun 14 2012 Analysis & Opinion Counterparties: Greece votes Beyond the numbers: do banks manage risk? A businessman waits to cross a street in Tokyo April 4, 2011. Credit: Reuters/Yuriko Nakao BOSTON | Wed Jun 20, 2012 10:44am EDT BOSTON (Reuters) - Using the previous year's numbers as you attempt to frame the next budget is the easiest thing to do but might not yield the best results, says Harvard Business Review. The Management Tip of the Day offers quick, practical management tips and ideas from Harvard Business Review and HBR.org (www.hbr.org). Any opinions expressed are not endorsed by Reuters. "When developing a budget for the coming year, the previous year's numbers loom large. Even if you challenge every assumption and explore every figure, you're likely to come up with numbers that only slightly vary from the last year. That's because those numbers anchor you, unduly influencing you. Instead of being tied to history and convention, come up with another anchor, one based on a different set of facts. Define a set of non-historical criteria. Look for objective competitor data, such as headcount or other benchmarking. Then, build a model based on these criteria. Ask: if we didn't know how we performed this year, but only relied on these objective criteria, what targets would we set? Use that model's output to challenge the status quo." - Today's management tip was adapted from "Re-Anchor Your Next Budget Meeting" by Dan Lovallo and Olivier Sibony." (For the full post and to join the discussion, see: here) Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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