Comments on: The Great Dysfunctional Corporate Budgeting Process http://www.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/ This blog is written by Dave Kellogg, CEO of MarkLogic Corporation, covering next-generation information management, enterprise search, and content management technologies along with commentary on Silicon Valley, venture capital, and the business of software. Mon, 06 Sep 2010 15:46:39 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Dave Kellogg http://www.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/comment-page-1/#comment-2059 Dave Kellogg Sat, 05 Dec 2009 17:55:53 +0000 http://test.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/#comment-2059 Ken -- thanks as well. We make "models" for future years by trending, but try like crazy to make sure the trended model doesn't become the plan! Ken — thanks as well. We make "models" for future years by trending, but try like crazy to make sure the trended model doesn't become the plan!

]]> By: Dave Kellogg http://www.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/comment-page-1/#comment-2058 Dave Kellogg Sat, 05 Dec 2009 17:55:15 +0000 http://test.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/#comment-2058 Neil -- thanks. Great to hear from you again. It's been a while! Neil — thanks. Great to hear from you again. It's been a while!

]]> By: Neil Raden http://www.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/comment-page-1/#comment-2057 Neil Raden Sat, 05 Dec 2009 15:56:09 +0000 http://test.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/#comment-2057 Dave,<br /><br />Great post. Thanks for reminding me to pick up a copy of Beyond Budgeting. I've been meaning to do that.<br /><br />Fifteen years ago, Hamel and Prahalad wrote in "Competing for the Future" that the budget process was an annual, "ritual rain dance," and argued for a more useful, rational process, but I don't recall that they actually spelled out how that would work. You've added more substance to that idea in just this one blog.<br /><br />I developed budget and planning software (as a consultant) for about 10 years, and my clients insisted on tools that were model driven and coherent across modules, not just roll-up's of all the separate plans. I'm sure they would seem primitive in technology today, but I always wondered why there wasn't a more vibrant market for this universal application. I suppose we've all been focused on other things.<br /><br />Thanks again for the useful post.<br /><br />-Neil Raden Dave,

Great post. Thanks for reminding me to pick up a copy of Beyond Budgeting. I've been meaning to do that.

Fifteen years ago, Hamel and Prahalad wrote in "Competing for the Future" that the budget process was an annual, "ritual rain dance," and argued for a more useful, rational process, but I don't recall that they actually spelled out how that would work. You've added more substance to that idea in just this one blog.

I developed budget and planning software (as a consultant) for about 10 years, and my clients insisted on tools that were model driven and coherent across modules, not just roll-up's of all the separate plans. I'm sure they would seem primitive in technology today, but I always wondered why there wasn't a more vibrant market for this universal application. I suppose we've all been focused on other things.

Thanks again for the useful post.

-Neil Raden

]]> By: Ken Kaufman http://www.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/comment-page-1/#comment-2056 Ken Kaufman Sat, 05 Dec 2009 05:58:43 +0000 http://test.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/#comment-2056 Great comments on the entire process. This is one of the most thorough discussions I have seen on budgeting in a long time.<br /><br />I especially agree with the thought that budgeting turns into a historical trending exercise that ultimately trends towards industry averages and benchmarks. Great comments on the entire process. This is one of the most thorough discussions I have seen on budgeting in a long time.

I especially agree with the thought that budgeting turns into a historical trending exercise that ultimately trends towards industry averages and benchmarks.

]]> By: Anonymous http://www.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/comment-page-1/#comment-2055 Anonymous Fri, 04 Dec 2009 03:28:32 +0000 http://test.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/#comment-2055 Two observations (may appear to be in-congruent with each other) -<br />1) There is a lack of basic education in the business community on how to plan (unfortunately only few people like or can plan), most like to solve problem in a political way. Most people just like to do things or feel happy that they are at least doing things rather than planning.<br />2) The planner kind of people are minority, so in this democratic society, they are likely to get pushed back (unless they are top executives, but alas the people in the middle and down below are outside his perimeter of direct influence). <br /><br />Such majority human behavior leads to this natural problem, however some education may improve the situation. Two observations (may appear to be in-congruent with each other) -
1) There is a lack of basic education in the business community on how to plan (unfortunately only few people like or can plan), most like to solve problem in a political way. Most people just like to do things or feel happy that they are at least doing things rather than planning.
2) The planner kind of people are minority, so in this democratic society, they are likely to get pushed back (unless they are top executives, but alas the people in the middle and down below are outside his perimeter of direct influence).

Such majority human behavior leads to this natural problem, however some education may improve the situation.

]]> By: Andrew http://www.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/comment-page-1/#comment-2053 Andrew Thu, 03 Dec 2009 16:50:09 +0000 http://test.kellblog.com/2009/12/03/the-great-dysfunctional-corporate-budgeting-process/#comment-2053 Great post on a subject that never seems to get addressed. I can relate to the issue of the process rewarding negotiation.<br /><br />Every year I was required to "negotiate" my quota in competition with other sales managers who were negotiating for less. Great post on a subject that never seems to get addressed. I can relate to the issue of the process rewarding negotiation.

Every year I was required to "negotiate" my quota in competition with other sales managers who were negotiating for less.

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