Simon Horton: Negotiating your L&D budget successfully

We all know that in tough economic times, the typical business response is to cut discretionary expenditure, the first of which to go is L&D. Yet we in L&D also know that this is not the best response. To survive in a market downturn, you need to perform better than before, which means upskilling. How else can you do more with less?

And yet, I have rarely seen this case to be effective. Why? Because it ignores J.P. Morgan’s maxim, “People buy for very good reasons. And then there is the real reason.”

Let us look at what this means in terms of securing your L&D budget.

Very good reasons

What are the good reasons? They are all of the commercially sound explanations that involve business strategies, KPIs, ROIs and other TLAs. The kind of reasoning people are very happy to bandy about during meetings to show how business-minded and commercially aware they are.

Now, it is not that we should ignore them; we have to provide these too. But this article will take them for granted. It will assume you understand your organisation’s strategic objectives and how that breaks down into targets for each department and team you work with. It will assume you sit down with the business and, for any intervention, you baseline in accordance with their KPI, you define controls, you convert learning outcomes to monetary values. It will assume you do all this in conjunction with the business, management and employees, giving them ownership of the results as much as yourself.

All of this is a given.

The real reasons

But what happens when you do all of this and the answer is still “No”? You need to find a different logic and you will find that in J.P. Morgan’s “real” reason.

Remember that your budget decision-maker is human (probably, it’s worth double-checking) and human beings have different drivers to spreadsheets. You need to find out what those drivers are: there you will find the real reason.

Humans have worries and stresses. If your programme solves any of these for your decision-maker, you will get your budget. Humans have ambitions. If your programme helps the decision-maker with their ambitions, you will get your budget. Humans have vanities. If your programme helps the decision-maker look good in front of their people (their boss, their boss’s boss, their customer, their peers), you will get your budget. Humans have jealousies. I am loath to say it but if your programme helps the decision-maker get one up on his peers, you will get your budget.

Humans don’t care about KPIs. That might surprise you because they act as if they do. In reality, humans care about them only if achieving that KPI brings a more important benefit. Like a bonus or a promotion or any of the drivers mentioned above.

What if we don’t…

Now, benefits are one thing. But if we are being realistic, most management is less motivated by benefits than by risk-aversion. So also put your case in terms of the risk of what may happen if you don’t upskill. Left behind by competition, smaller and smaller share of market, bloodshed in cost-cutting race to the bottom. And so on. Don’t hold back!

Of course, you would have done your SWOT analysis for the organisation in the marketplace (one of those givens, remember?) but if you want to persuade someone, do a SWOT analysis for them. If you are trying to persuade your boss, what are the opportunities they are eyeing up? What are the threats that worry them? What are their strengths and weaknesses with respect to these? Now frame your argument in terms of these and you are much more likely to get agreement.

Only we don’t say these real reasons out loud, of course. We say the very good reasons aloud, but leave the real reasons there to be inferred.

It’s true, sometimes our boss is not quite as intelligent as we would like them to be and they don’t actually make that inference, no matter how obviously it is to their benefit. In which case, cough loudly, nudge their elbow, wink, do whatever you have to do to make sure they get the point.

One more thing

Oh, and humans have egos too and this is important. In general, there is one thing you do with egos: boost them. Especially if they decide your budget.

Tell them what a good idea of theirs it is. Let them take the credit for it, let them take the credit for the results, then they really will champion it as though it was theirs. Tell them what a great manager they are and tell them how they make such good decisions. Not only will they give you your budget, you will probably get promoted too!

Does all this sound too Machiavellian? Well, remember, you only need to do this if the business logic is not enough. If you make a sound business case and it is accepted, fine. But if it is rejected, the decision will be based on a different rationale, and it is that rationale which you need to address.

After all, we are only human.

The Author

Simon Horton is the author of Negotiation Mastery: Tools for the 21st Century Negotiator (£12.99), available now from Amazon and high street bookstores. Simon is a negotiation skills expert, and has worked with hostage negotiators, top law firms, tier one banks, and the purchasing departments of some of the largest manufacturing companies in the world. He runs Negotiation Mastery Ltd, a centre of excellence in the field of negotiation.

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