What does it take to make a major budget cut?
The Challenge
Pretend that when you went to work today, you were told you need to cut 35% of your team's budget. Pretend some anticipated funding or project did not come through. Pretend it's truly urgent. In other words, if you can't do it, then your organization may have to close the doors. Now take just five to 10 minutes to identify the first two or three steps you would take upon hearing this news. Think about who you would tell, what you might say, who you could ask for help, and what resources you might have. Think about the starting point for your analysis, the rationale for your decisions, and potential creative solutions.
Why do this?
Remember, this is just a drill! But running through a drill for this very difficult situation will help you prepare if it ever does happen. It could happen to anyone, at any time (to varying degrees), whether you work in government, for a nonprofit, in a for-profit company, or for yourself.
Practicing how to handle difficult situations before they happen, and thinking through how you might make tough decisions during a budget crisis, will improve your readiness if and when it does happen. Not only will you feel less fear and trepidation (because you've practiced!), you will also know your first few steps. That will likely put you several steps ahead of your colleagues so you can lend a hand to help them, too.
What’s next?
Why not practice the same drill with your personal finances? If you had to cut even 10% of your personal spending next month, would you know where to start? Make your plans, just in case; then you can breathe easier if you ever want or need to do it for real.
