Training Badge
Submitted by robin_s on


It's that time of year!  I will be submitting my departmental budget in about a week, and shortly after will have a meeting with my boss (CEO) in which he will inevitably ask for reductions, and I will be making my case for my numbers.  My budget isn't padded but is realistic.  This is a crucial conversation because I (and my team) will have to live with the results for the next year.  One of my weaknesses is that I tend to capitulate under pressure, especially from my boss.

I'd like to hear some tips from this community on how to successfully defend a budget.  Is there a cast for that?

Technophile's picture

I have this problem as well. There are some meetings where I remind myself to put on my 'D' hat.  Communication is what the listener does. Speak in his or her language. If your CEO is a D or I you will really need to adapt your style for the meeting. 

I would also remind you that while you need to speak honestly and openly about your needs and the reasons for your budget. It is the CEOs responsibility to decide where the company is going to focus.  If your area is not as important as some other area then you will not receive everything you want. It is a hard reality sometimes.

swboucher's picture

Good reminder on why we may not get everything we put in our budget.

I would add one thought.  The CEO cannot possibly know each division leader's business to the depth that we do.  It's up to us to be emphatic on the essential stuff -- and prepare in advance to back it up -- so that we help the CEO make the best decisions.

Mark's picture
Admin Role Badge

...and I'm sorry we haven't gotten to all of our thoughts on budgeting.

Here's a couple of good general rules for you:

1.  Know WHY everything is what it is.  Why is that number that number?  WHAT went into it?  One of the biggest mistakes managers make in these discussions is forgetting that the number on the budget comprises smaller items (or at least, they always did with mine).  Any cut is a cut to the underlying STUFF - training, people, supplies, travel, etc.

Some folks call this "having a story," but I've always felt that led folks to want to tell stories about the numbers...and this has, in my experience, been ill-received by bosses who are THINKING NUMBERS.  I'm not saying the "story" thing is wrong...I just think it's not an effective thought process to lead oneself into a defense prep.

I see it more as, "here's what's in that 83K: 41K for servers, based on last year's market rates and I can't be sure those will hold, 9K for seat license upgrades, which we've committed to the customer for,..."  That, to me anyway, isn't a story, but rather a line item defense.

The above implies you know every freaking nit about your budget.  Don't talk to me if this sounds hard because you don't.  ;-)  LEARN IT.

2.  Know where the cuts are going to be.  If you're asked to cut 2-3-5%, have a case already prepared, and show WHAT IS GOING TO GET CUT.  The normal boss (in this case, I'm talking the guy who is going to ask you to cut) is thinking about making his or her number fit..but NOT about the line items that are being affected.

Somebody once told me that my #2 above sounds like, "being ready to lose".  I disagreed, but only partly.  As I see it, the way to "win" is to make the cuts real, and show mastery of your spending.  Try to show your boss how the cuts will affect what she wants to accomplish.  

And, the fact is, most guys in your shoes DO lose this being ready to lose ON YOUR TERMS is something I can live with.

Good luck.


ChrisH__'s picture

Mark's 2nd point is really important - you need to be able to explain the impact of any cuts, beyond what can no longer be bought.

i.e. we can cut 5% from this line item, but then we can't afford X and Y, which means we can't launch product A in territory B, or our customer service response time will slip below C.

Keep the outcomes realistic though, don't be melodramatic.

Don't forget that 'your' budget is actually part of your boss's budget.




robin_s's picture
Training Badge

I'm grateful for these forums and for the time you all take out of your busy lives to respond.  I agree that the best defense will be knowing the effect on business results of a cut to any part of the budget.  I'll let you know how it goes.  Thanks again.


LFinkle's picture

First you should know that in any negotiation the person with the power is NOT the person who has it but the person who believes they have it. So if you go in feeling beaten before you start you'll always come out the loser.

In the past has the CEO reduced your budget amount routinely?  If so they play the game...increase the amount you need and then settle for something you can live with.  If this hasn't been the case they I suggest the following:

1. come prepared to identify the benefit of each line item on your budge.  If it's related to a project or providing a service to the organization tell him what he gets for spending this money, and what will happen if he doesn't.  Fear is a great motivator to get people to say yes.

2. be prepared to knock out a project, line item or something.  You should go in prepared to fight for what you absolutely, positively need and put the things you would love to have but aren't crititcal at the bottom of the list.

3. Explain how your department and the money you are requesting will help him meet his strategic goals for the company


This sounds like a great question for a product we are creating. I'd love your insights. Click to submit questions or ideas and a chance to win the product.&nb