Surprisingly, some everyday experiences do not reach the consciousness of certain people. Managers, who are responsible to administer the means, often live in a world of apparent abundance. They waste their energy into the extension of budgets instead of taking care for a more reasonable use. For those, the gasoline tank should be a helpful metaphor to better understand the budget.
A truck tank seizes approx. 900 liters. With an average consumption of 40 liters at 100, you can achieve a distance of 2000 km depending upon the landscape and cargo.
Managers have likewise a kind of tank – the budget. They must fulfill their tasks within the respective budget. In the absence of a reliable planning and an awkward distribution of the means, however, bottlenecks develop frequently. Then they try to substitute the limits with exaggerated expectations and requirements for the contractors, the employees and suppliers.
The analogy of the tank offers a good idea, why this does not work. The following aspects are likewise valid for the tank and the budget.
The size of the tank determines how much gasoline can be refueled. With a truck this can be easily about 1000 liters. This maximum filling determines the range. If more is used, then either a second tank has to be installed or refueled from time to time.
The same is valid for the budget. Depending upon the task setting a manager receives a limited budget. It is used to pay employees, material, services etc. The annual budget should be large enough to realize the tasks. If it is not enough, the budget must be laid out bigger in advance, or in the current year additional budget must be requested and made available.
In the two examples the size cannot be increased at will. This means that the availability of resources is never infinite.
- Necessary consumption
The consumption of a truck specifies how far it can drive. This varies strongly, dependent on the cargo, the traffic and the scenic conditions. Empirical values help to plan correctly.
The consumption of the budget results from the project. Depending upon the structure of a project and/or the employment of external forces it costs more or less. The quality of planning is defined by the experience of the planners.
The optimum use arises in both cases from an economical allocation in the really necessary places. Despite all thriftiness a minimum consumption is mandatory.
- Economical investment
The driver determines with his driving style the economical use of the fuel in the tank. Foot down to the ground and unnecessary braking’s burn more gasoline, than actually necessary.
The managers and the employees together determine by their expenditures, how effectively the budget is used. Generous distribution and unnecessary double work increase the costs.
By focusing on the essential the users have a large influence to use resources skillfully. In each case consumption cannot be reduced to zero by thriftiness.
The maximum range of a truck results from the size of the tank and consumption. The weight that has to be moved and the inclines of the landscape have an influence on this range.
The budget is normally planned for one year. Although the monthly consumptions are fixed in advance, the budgets vary due to unexpected expenditures. They result from bad plans, unexpected additional costs and unrealizable savings.
Due to the basic conditions the range cannot be increased without limit.
Even so resources are scarce in all areas, the handling of budgets is characterized by enormous boundlessness. The efforts concentrate more on the provision and procurement of budget, than on the correct assignment of the means.
Bottom line: The awareness of limited resources is the basis, in order to achieve a larger range with the smart application. The tank as conception could help one or the other to better understand the application of the own resources.