What do you do if your budgeting and forecasting lacks empathy?

1 Why empathy matters

Empathy is the ability to understand and share the feelings of others. It helps you to build trust, rapport, and collaboration with your team, your clients, your suppliers, and your investors. It also helps you to anticipate and address their needs, concerns, and feedback. When you budget and forecast with empathy, you show that you care about the impact of your work, and that you value the input and perspective of others. This can improve your accuracy, your credibility, and your relationships.

2 How to assess your empathy level

Gaining an understanding of your current level of empathy is essential before you can work to improve it. To do this, you can ask yourself questions such as if you are actively and attentively listening to what others say and how they say it, acknowledging and validating their emotions, asking open-ended questions to explore their views and motivations, showing interest and curiosity in their stories and experiences, and expressing appreciation and gratitude for their contributions and support. Alternatively, you can seek feedback from others or use a self-assessment tool like the Empathy Quotient (EQ) test.

3 How to increase your empathy skills

If you want to become more empathetic, you need to practice and develop some skills, such as perspective-taking, emotional regulation, and empathic communication. Perspective-taking is the capacity to see things from another's point of view without judging or imposing your own. Emotional regulation is the ability to manage your own emotions, particularly when they are negative or intense. Empathic communication is the ability to express your empathy through words and actions. This can be done by using empathic statements like "I hear you", "I understand", or "I'm sorry" and non-verbal cues like eye contact, nodding, or smiling.

4 How to apply empathy to budgeting and forecasting

Once you have improved your empathy skills, you can use them to enhance your budgeting and forecasting process. Involve others in your activities, explain your rationale and assumptions, and anticipate reactions. Ask for their input, opinions, and suggestions. Present your numbers with evidence that supports it, and consider risks, opportunities, and trade-offs. Think about their expectations, hopes, and fears. Be prepared for their questions, objections, or emotions and respond with empathy offering support and solutions.

5 How to measure your empathy impact

To know if your empathy is making a difference, you need to measure its impact on your budgeting and forecasting outcomes. You should compare your actual results with your budgeted and forecasted figures to determine accuracy, assess how others perceive and trust your work to measure credibility, and evaluate how others feel and behave towards you to measure relationships. How close are the figures? How often do you need to revise them? How do others use it for decision-making and planning? Are they satisfied, engaged, and loyal? How cooperative, collaborative, and supportive are they?

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?