Sometimes, leaders fall into a trap and get these two concepts confused, especially when their budget is tight…like these days. Simply stated, expenses represent dollars that go out the door with little or no return. Investments, however, bring about change and improvements that provide tangible value to the organization. How well does your budget process and planning take that difference into account?

We will soon begin a new year and for many organizations, a new budget kicks in and takes control. One problem with annual budgets-they make you look at things in isolation, one year at a time. It’s like looking at one photograph at a time. Nice as far as it goes, but does it tell the whole story?

I suggest you take a look at several years at the same time. That creates a movie. What kind of movie are your budgets creating? Before you begin 2011, pull out your budgets from the last three years and line them up on your desk.

Now, take a look and see what’s happening over the years in a few important categories. That is the best way to see how your planning and investing are impacting the organization long term. Let’s start with Training and Developmen. How does it look? If you are like most agencies, probably not so good.

For many organizations, this budget item has never been very large yet since 2008 it has taken even bigger hits. Certainly understandable, but how long can you go without reinvesting in and retooling your most important asset-your leaders and key staff?

If this category is being red penciled again in 2011, you may want to rethink that move. Can your organization really afford to let staff skills ride for another year? Aren’t there any training programs and experiences that would bring back an acceptable return to your agency?  Also, as you lead in this new reality, doesn’t your organization need NEW skills and tools to succeed? Your solutions and approaches from 2005 probably aren’t going to work today. Can you afford not to build into your team?  I say, it’s time for a new perspective.

Other categories include Employee Recognition, and Volunteer Recruitment and Appreciation. Since staff and volunteers are probably being taxed to the limit with huge increases in workload, responsibilities, and clients to serve, you may want to rethink any additional cuts here. These folks are mission-critical and need attention and appreciation once in a while.

Seems to me that at a time when your people are facing their greatest pressures is not the time for further cuts in these areas. If you look at these categories as investment…not expenses…it seems pretty obvious.

If you’d like to hear more, call me-let’s talk.