How to smooth a budget model transition and win stakeholder buy-in

Expert Insight

How to smooth a budget model transition and win stakeholder buy-in

When it comes down to it, the most powerful factors in the success (or failure) of a budget model transition are people. This includes those who are included directly in the effort, and how those who are indirect stakeholders are swung to your cause.

Executives who focus energy on these people early and throughout the process will enjoy a greater chance of rolling out a well-considered—and well-received—new budget model. The ideas presented here can guide senior finance executives shaping their budget model efforts, other members of the finance team seeking to understand when and where their expertise comes into play, and partners from the academy whose participation is also vital to a successful project.

Who you should include in budget model design decisions to maximize buy-in

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This resource is part of the Build a New Budget Model that Advances Your Institution’s Strategic Goals Roadmap. Access the Roadmap for stepwise guidance with additional tools and research.

The first important decision is who to include in the model design process. And it’s one that has a ripple effect across model rollout, implementation, and ultimate adoption. While senior leaders should ultimately dictate the most important model design decisions, having the right voices in the conversation can improve the quality of decisions and ultimately the reception in the wider campus community.

Target the most important design decisions

Fortunately, a small handful of decisions have a disproportionate impact on the model success or failure. Our publication Aligning the Budget Model to Strategic Goals details the 13 executive-level decision points to help business executives focus on the most impactful budget model design elements. These core budget model decisions should be made by a focused group of senior leaders, typically the chief business officer, the provost, the president, and the budget director. Importantly, these executives should focus on overall institutional priorities—rather than technical financial details, or campus politics—when deciding on the key budget model design elements.

Start narrow for big decisions and then go wider to gain buy-in. There is an ideal core budget model team and ideal budget model steering committee.

After the key decisions are made, the remaining decisions can be largely opened up to the budget model committee or taskforce. The committee should include a large cross-section of campus stakeholders—including deans and faculty—who can serve as “model champions” on campus. To maximize buy-in and to incorporate important perspectives, institutions should consider including the dean with the most financial expertise, the dean of the largest college, and the dean likely to be most skeptical of a budget model change.

This division of labor gives the academic leaders on the budget model committee a share of ownership over the model, generating important goodwill and support. More importantly, it ensures that senior leaders dictate the decisions most critical to model success.

Getting deans to consider the greater good

Including a wide range of stakeholders on the budget model committee helps create champions for the model. But this approach also risks that stakeholders will make biased decisions and advocate for models that benefit their individual units—to the detriment of the greater good. In fact, one institution that used real financial data early in the model design process was forced to completely abandon their redesign efforts due to bias from unit leaders.

To avoid this scenario, leaders should focus most of the design process on the overall model philosophy and high-level mechanics. Similarly, when communicating a new model to the larger campus community, leaders should focus stakeholder attention on how the model aligns with institutional values and priorities rather than the model outcomes.

Stakeholder buy-in

To ensure budget model success, it is vital to get the seal of approval from other, more distant stakeholders. Executives must secure stakeholder support not only to mitigate conflict, but to ensure deans and faculty respond to the models’ incentives.

Clearly, designing the right model that fits with institutional goals, priorities, and culture is the best way to minimize pushback on your campus.

But beyond effective model design, there are a few relatively low-effort tactics institutions can adopt to help smooth a budget model transition.

Answer the call

One tactic is to demonstrate to stakeholders how the new model addresses their concerns. UC Riverside did this by distributing a survey to key campus stakeholders asking them to describe the shortcomings of the current budget model. Based on the responses, leaders at Riverside created a word cloud illustrating the deficiencies of the current model and justifying the need for change. The survey also asked respondents to describe characteristics of their “ideal” budget model, which leaders later used to generate a depiction of the new budget model. This exercise helped leaders at Riverside demonstrate that stakeholder feedback had been a central part of both the decision to change models as well as the new budget model design.

Apply a budget model thesaurus

Another low-cost tactic to secure stakeholder buy-in for a model redesign is to adopt new budget model terminology. For example, some institutions substitute contentious terms like “subvention” and “overhead tax” with more positive phrases such as “One University Fund” and “college’s share of expenditures.” Though it may seem like a minor change, word choice can greatly influence stakeholder perceptions of a new model. This strategy is especially worthwhile for institutions seeking to disassociate from a previous unpopular model and create a clean slate.

Old terminology vs. new terminology

  • One university fund
  • Structural budget deficits
  • Strategic investments
  • University fund charge
  • Strategic investment fund contribution
  • College share of expenditures
  • Financial contribution
  • Unique unit profiles
  • Algorithm
  • Contributors and mission-critical units

Interested in more on this topic?

This study includes four executive-level lessons on budget design and a compendium of 29 budget model elements to help you develop a more strategic resource allocation system on your campus.

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