You have probably experienced the disappointment of realizing that the budget you are provided is very tight for what your team is being asked to do. You feel like you are at a disadvantage from the start. Maybe the sponsor is not fully aware of what is involved. The sponsor may have unrealistic expectations. You don't want inadequate funding to reflect badly on your team!
It's easy to become demotivated at this point - IF you are not sure how to prepare for this situation.
When you are assigned a tight budget, it's time to discuss it with your team in a positive and constructive way. Your team is a valuable asset and can help manage the situation. They can anticipate problems and help develop effective communications related to those problems.
Important Understanding of Your Project Budget
Before speaking with your team, it is useful to have some background related to your project budget. If you are involved with or receive communications about organizational strategy, you may have detailed knowledge of how the budget was generated. You may have access to a business case that clarifies background and expectations. In other situations, you may only have a brief discussion with your sponsor to learn about the budget. Either way, this is good information to have before you discuss the budget with your team.
The budget may be able to be increased with justification following an escalation process. Or it may be that the solution your team is delivering will not be worth the expense beyond your assigned budget (or something close). If this information can be shared with your team, it will serve as a basis for planning. It will also help the team feel connected to the strategy.
Address any Adversarial Attitude
Once your project team finds out about a constrained budget, they will very easily fall into a frustrated “us” against “them” attitude. This will lead to unconstructive behaviors that will reduce performance and make the workplace less enjoyable, unless you take action.
You can avoid the team getting into an adversarial attitude by facilitating conversations toward an approach that is positive and constructive. As you facilitate, maintain a positive attitude to lead by example, even if you feel the frustration strongly. Listen patiently to any complaints and redirect discussion toward these points:
- The business case for the effort, including background and whether the sponsor and stakeholders prefer to increase the budget only when more information is captured during delivery.
- A tight budget is like any project constraint. The team will plan to meet the constraint and then monitor to confirm the plan is working. Keep it routine.
- This situation can actually be an opportunity. How the team responds will show how highly developed it is. Teams that communicate accurately and in a timely fashion about the budget risks are seen as valuable in an organization. If the team is successful at letting sponsor know quickly when there is a significant danger of running overbudget – and the reason why - it will reflect well on the team.
- Outstanding teams identify risks that will be most likely to result in the budget being exceeded. Focusing on these risks in routine work and project reports is the mark of advanced teams.
Of course, you will adjust the detail of the above points based on the experience level of your team or individual team members. You can facilitate more experienced team members to persuade less experienced team members that it is possible to succeed even under a frustratingly low budget.
Be ready to field questions or statements that are based in fear. Acknowledge that fear for the benefit of the team member and other team members. A team member may have been burned before in a project with a tight budget. Once the fear has been acknowledged, it is fine to move on to facts or possible actions.
Do not give this facilitation step a quick pass. You don’t want to leave fear or resentment simmering in your team. Take the minutes necessary to air grievances and discuss opportunities.
Once you have the team looking at the tight budget more optimistically, you can move on to the next step, identifying those factors that will tend to bust your project budget. With the team’s improved attitude, they should have energy to create a good list with the knowledge that they are promoting themselves while protecting the organizational strategy.
This step of looking at budget risks will be covered in my next post.
Don’t forget that you can also find my articles on this site.
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