Balme found a position more suited to his personality when he was appointed football operations manager at the struggling Collingwood in 1998. In 2000, he was joined by former Richmond teammate Mick Malthouse (as coach) as part of an ambitious plan to lift the ailing Magpies up the ladder. Balme's calm, rational demeanour and casual style proved to be a great foil to Malthouse's more intense and temperamental character and the team made it to the 2002 and 2003 AFL Grand Finals, only to lose both matches to the Brisbane Lions.