Last week, I (Hamish) was in a meeting for around 45 minutes. Afterwards, I checked my phone and saw missed calls from seven different customers. For me that's unusual, so I started to wonder what was going on... I checked my texts, and it turns out people were freaking out about the increase in the NZ Minimum Wage.
NEWSFLASH! It's going from $21.20 to $22.70.
There are a few arguments to consider here. One is that the most vulnerable in our society need this increase simply to be able to live. That argument is true.
Another argument is that this increase is unfair to those earning just above the minimum wage. Or, it's going to put pressure on employers to lift wages across the board. These arguments are both true.
Then there's the argument that small businesses simply can't afford it. Again, true. Or, that big businesses are exploiting workers by paying low wages. Yup, true.
All of these arguments are true for some people and, none are true. Ultimately, it just doesn't matter.
This truth dilemma (so to speak) applies to everything - not just minimum wage. It's not a matter of changing someone's perspective, it's a matter of accepting that there's more than one truth.
Back to those missed calls... My advice to our clients was, ignore it for the moment. They were anxious about their finances (rightly so), and in no place to make a decision. Any decision they made (hire fewer staff or change payrates across the board) would be laced with angst towards someone else's truth.
The conversation with those seven business owners wasn't about procrastinating a decision. It was simply to make it as part of the business-as-usual budgeting process.
Which is a lovely segue into the topic-du-jour of...
Nice segue huh? Yeah, I get it. You hate budgeting. But, please, bear with me... the new Financial Year is just around the corner!
In 1984 the Harvard Business Review described budgeting as a tool "designed to set acceptable targets for revenue and expenses, then to increase the likelihood that targets will be reached". They said it's about planning, implementation and timing, alongside control, evaluation and bonuses.
Since 1984 they've rolled with headlines such as "Corporate Budgeting is Broken" and "Turn your Budgeting Process Upside Down". But in reality, it's still the same.
So, let's change it.
Swap out our "use it or lose it" approach to budgeting (if that's your approach, you've lost it whether you're spending the money or not). Replace it with a permission to spend.
Start with Why your organisation, team or business exists in the first place (thanks Mr Sinek). Then work out the different Pillars that help you achieve your Why. At Convex, it's technology, people and customers.
For each Pillar, define what Success looks like. Come the end of the quarter or year, how should technology be pushing us towards our Why - it's unpacking what the good looks like.
Finally, how do the Pillars Connect to each other? Nothing exists in isolation, so we need to understand the interrelatedness.
BUT!! There are two things to bear in mind.
Firstly, please don't do your usual budgeting process. Sure, it's helpful in showing you whether you're on track, but it's not useful in helping you get where you need to be.
Secondly, think about what you want from each of the Pillars. What are they contributing for the spend in each area. How could you change their cost, or contribution? Don't just spend the same amount you spent on it last year...
If still scratching your head about your budget for the new financial year, then get your copy of my budgeting template HERE. It might just change your approach to the coming 12 months...
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