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Sticking to a tight budget

Stretch every dollar to make it count

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in Leaders & Managers,Management Training

You’re expected to maintain the same staffing and performance, even as your budget gets cut. Sound familiar?

To survive and prosper, collect political capital in exchange for your penny-pinching. And if you can’t expand your unit or launch ambitious initiatives, focus on educating your employees on ways to economize and boost efficiency:

Follow the numbers. Adopt open-book management principles by teaching your colleagues and employees about the numbers that drive the business. When people see how your company earns a profit, they may work harder.

Example: A trucking company announces a budget freeze due to higher fuel costs. A manager regularly updates his team on the firm’s operating ratio—which measures operating expense as a percentage of revenue—and rallies employees to keep it under 80 percent. This approach makes a game of keeping costs down.

Propose, don’t complain. When talking with higher-ups, identify how you and the firm can cut costs. Treat it as an exciting challenge, not a grim defeat. If you’re resilient and resourceful, you’ll reap rewards later when there’s more money.

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