Ahead of the budget review, a sponsor walks the finance lead through the model, adopts their corrections, and asks how to present it, so the review opens with finance already vouching for the numbers.
An example
The head of fleet at a national parcel carrier wanted to replace a third of the company's diesel delivery vans with electric ones over three years. The capital review was six weeks away, and the finance lead for operations had a reputation for tearing apart models she had not seen. He sent her the model a month early and asked for an hour. She found three problems: battery replacement costs were missing, the residual values were optimistic, and the charger installation schedule was too tight. He fixed all three and asked how she would present the case. She suggested leading with total cost of ownership over eight years. At the review, the chief financial officer turned to her first, and she said the model was sound. The program was approved, with a smaller first year than he had asked for.
Why it works
Budget reviews lean on the finance lead's judgment of the numbers, and a model finance has not seen is a model finance doubts. Walking the finance lead through the model early, adopting the corrections, and asking how to present it gives the proposal more standing, since its numbers have been checked by the person the review trusts. It makes approval easier, since finance vouches for the figures instead of attacking them. Success turns on a finance lead willing to engage early and a sponsor willing to accept corrections. It fails if the sponsor ignores the corrections or treats the meeting as a courtesy.
The thinking behind it
John P. Kotter Kotter's The General Managers (1982) found that effective general managers set agendas early and built networks of cooperative relationships with the many people their agendas depended on, inside and outside the chain of command. In Power and Influence: Beyond Formal Authority (1985) he argues that because managers depend on people they do not command, they must build influence beyond their authority. A finance lead whose judgment the review trusts is one of those people.
When it fits
Any proposal that goes through a budget review where a finance lead or analyst carries weight can use it. Time before the review, a sound model, and the willingness to change it are the requirements. It suits a sponsor confident the case will hold up under close scrutiny.
How to use it well
Contact the finance lead early, a month or more before the review. Send the model and ask for their time.
- Walk them through it, and ask what they see as weak.
- Fix what they find, and show them the fixes.
- Ask how they would present the case, and take the advice seriously.
- Ask whether they are comfortable saying the numbers are sound.
Treat their corrections as improvements. A model finance has helped shape is one finance will defend, and the review can then spend its time on the decision itself.
What it costs and where it backfires
Early engagement exposes weaknesses before you are ready. The finance lead may find problems you cannot fix and say so at the review. Corrections can shrink the case. Openness is the line. Hiding parts of the model from finance, or pressing them to vouch for numbers they doubt, turns the move into capture of a gatekeeper and puts their credibility at risk along with yours.
When it is used on you
Find out from finance what they checked, and what they did not, when a rival's model arrives with their endorsement. If you think the endorsement is mistaken, take your concerns to finance before the review, with your own numbers, and give them time to look again.