If you want to promote the behaviours of your best leaders, give them a larger span of control and ability to influence. Cents for Sense is simply that.
At the end of the fiscal year, instead of shrinking all budgets, increase some. Specifcally, give your best leaders more budget, year-over-year, rather than less.
Companies have many leaders. Some good, some excellent, and others less so. It's difficult to grow a culture of leadership.
Operational budgets are an under-explored resource for thinking about how much influence do you want to give to which leaders.
Additionally, traditional budgetary practices call for across the board reductions. This is fundamentally wrong from a psychological perspective. What a horrible way to say "good job on saving us money", by stating, we will take the savings and give you less next time. How hard will that leader work next year to find savings?
Expand the budget for excellent leaders.
Stop taking the savings. Give gains back to the leaders who create them. Some precision, do everything possible to see the budgets of individuals, displaying the leadership you want, increase (in other words, the ends don't necessarily justify the means).
- Send a powerful message. It's a clear simple message to leaders - this is what we value. Certain behaviours are highly desired.
- Increased influence of leadership behaviours. The rewarded behaviours are reinforced, demonstrated more often, and aspired to by others. Other leadership behaviours are not. The result is a greater impact coming from the behaviours you want vs the ones you don't.
- Engages leaders. Your best leaders get more, and are able to do more.
- Leadership alignment. Your best leaders share a common set of behaviours, even if realized differently, this helps to create a culture of leadership. It has everyone "rowing in the same direction."
- Clarity. You need to be really clear about what you expect from leaders; what specific behaviours you want to reward, and how to "see" or measure them in a reliable, valid way.
- Consistency. Assuming the clarity is achieved, it only works if applied in a transparent, consistent manner. If anyone feels the process or the outcome is unfair or went through a "black box process", it won't work.
- Communication. All leaders need to hold a very similar understanding of what is meant, expected, and how it works. This may require a lot of communication to minimize misunderstand, misperception, or confusion.
- (So much for the c's) Visibility. The most powerful way to create norms is to make the outcome visible. You want people to see, hear, and feel the results to make the feedback real. This may require some thought about how leadership and employees best consume and attend to information.
- See what's possible. Are there financial regulations, practices, limitations that would need to be taken into consideration. Within those, explore what's feasible and sustainable for the organization.
- Start at the top. If your top leadership team isn't treated the same way, it sends confusing and mixed messages about what leadership behaviour is expected and from who.
- Start talking about leadership. What are the key behaviours you want to reward? How might they be measured? Think about how you would qualify or disqualify someone for this kind of reward. Thinking in simple principles might be more helpful than specific contexts. The more you can be context agnostic, the better it would suit leaders in multiple operational realities.
- Be execution obsessed. Don't kinda do it. Given how important the perceptions, communications, and results would be, making quick adjustments would be key to the credibility of this initiative. Consistency, transparency, and fairness are critical. This doesn't mean it has to be perfect out of the gate, but it does mean, it has to be responsive and principled.
I'd like to credit budget policies that make no sense to me for the inspiration.