Approach to Budgeting.
Budgeting is considered a high impact and hard to reverse decision at the organization level. So we will use a group method called the Advice/Consent process, highlighted here.
Here are the steps that we followed to have a clear vision of what we intend to spend in the upcoming quarter.
- Finalize the priorities using the OKR method.
- Propose projects with a “justification” template in PNF-Projects discourse.
- Discuss asynchronously using the discussions within the projects thread.
- Check-in meetings to sync and provide clarity on pressing topics where needed.
- Meeting to finalize which projects are both needed and reasonable to begin using the “no-objections” methodology in decision making
- Set “do not exceed” for the quarter for each project or workstream.
- Marked the ones that may require ad-hoc determinations or syncing with engineering.
- Included do not exceeds in our quarters projections.
- Final review of the budget projections sheet.
Monthly Expense Reports
Each month Gaby sends out a monthly expense report that allows us to track projected spend vs our actual spend for the month, in order to have insight into projects as they project and where areas of improvement can be worked on.
Quarterly Budget Sync
Quarterly budget sync is where Ecosystem and Engineering come together to finalize the budget strategy for the next quarter.
Beforehand these things need to take place
- Each team will need to go through an OKR review at both the team and department level, to report on how things went last quarter and to finalize the OKRs for the following with appropriate justifications.
- Each team will need to get together and create a report of how each project went and whether recommend either a reduction, increase in budget to or keep as is.
- Each team will need to come together and make recommendations or adjustments to the budgets for new projects or strategic iniatives that they believe should be included in following quarter.
- There should be a formulaic presentation of all of the above that comprehensively address’ possible concerns or additional asks like involvement of others etc.
In addition the finance team should present.
Expense Report for the quarter that includes
- Areas we went over, why and what we will do about it
- Areas we went under, why and what we will do about it
- Where this puts us as an organization in comparison to the last projections cycle.
- Additional important information for the purpose of the call.
By the end of the call, we should have a new tab in the projections sheet with updated projections moving for this quarterly, and complete team alignment on the next quarter.
Ad-Hoc Budget Proposals
At the start of the quarter there is an elected oversight committee who has a framework/experience to make those final calls.
The current oversight committee is _____ _____
Ad-hoc proposals should be expected to take 2 Weeks to come to a conclusion, and it the responsibility of the proposer to lobby using the appropriate process(advice/consent) with a best effort approach. In the event there is no engagement the oversight folks can make a call.
The framework derives from the budget strategy calls and the proposal templates. Budget strategy calls will give stuff like runway window everyone is comfortable with, and results vs. projected for historic data.