What is the right balance of fiscal responsibility versus social responsibility? Don Braid wrote an article for the Calgary Heraldon on the prevalence of mayoralty platforms focusing on fiscal responsibility vs social responsibility. He argues that most of the mayoralty candidates are talking about fiscal responsibility at the expense of social issues. http://www.calgaryherald.com/news/Braid+Decline+public+civility+shows+Calgary+needs+leader+with+heart/3493074/story.html
Outside of politics, as CEO/CFO of your company, or of your Life, this is a constant balancing act. How do you manage money and budgets in the face of competing and increasing demands? How do you manage the various stakeholder expectations? How do you keep debt under control?
There are a few important principles:
– Set objectives for what you want to achieve, including social responsibility issues.
– Set written budgets that do not exceed your cash flow, and support what you want to achieve. Prioritize what has to be spent and what is just nice to have.
– Have a contingency fund for emergencies or unexpected events.
– Review budgets versus actual spending regularly in order to re-balance. This is about re-allocation, not exceeding your cash flow. If cash flow is truly inadequate, where can more cash flow come without sacrificing other important objectives ?
– Make sure that all stakeholders have commitment to budgets. In companies, this means all employees; in families, this includes all family members.