Your staff are reluctant to suggest innovative ideas for fear of being expected to deliver them without additional resources.

Challenge

Your staff are competent and creative. And they probably have lots of great ideas for how they could better serve their customers.

But if you believed that you'd be expected to take on more work without more resources, would you bring those creative new ideas forward? Many people will not.

To unleash staff's creativity and entrepreneurial spirit, you need reliable processes for ensuring that new expectations come with incremental funding.

Solution

Your budget only pays for so much in the way of deliverables -- your projects and ongoing services. Perhaps you can optimize priorities to some degree; but just eliminating a few low-payoff services and unnecessary costs may not add up to enough to fund innovation. (In IT, this is especially true here in the era of the "digital enterprise.")

So if new ideas are accepted, you need a reliable process for ensuring that funding comes with new expectations.

In a traditional budget which forecasts what you'd like to spend on costs like compensation, travel, training, and vendor services, there's no way to do this.

An investment-based budget is the answer. It associates all your costs with deliverables -- your projects and services. New ideas appear as new line items, fully costed (including fair share of indirect costs to account for the budget new initiatives place on internal support services).

If the business agrees to "buy" new deliverables, the impact on your budget is clearly documented. Conversely, if the funding isn't there, you simply cannot agree to deliver it.

Linking funding to expectations frees your staff to be creative and proactive, proposing new products and services (and defining their costs) and hopefully generating substantial value to the enterprise.

Comprehensive solution....

Other Resources

White paper: Best Practices in Budgeting
an introduction to investment-based budgeting.

Video Overview: The Leading Edge: Investment-based Budgeting
The problems it solves, the concepts and process, examples, and results.
SmartPros' Financial Management Network (30 min)