Are you comfortable being uncomfortable?

Whether it’s zero-based budgeting or ground-up planning, a strategy review with a brutal objective and a non-assumptive eye can be as liberating as it is frightening. 

Zero Based Budgeting: Where do you start

EOFY

We were discussing the merits and challenges of zero-based planning with a group of our CMO clients recently. Whilst conceptually everyone understood its merits, we were asked:

Where do we start?

Top down, or bottom up?

What’s up for evaluation- everything?

How does it balance with longer-term, investment planning?

Where to start varied considerably from industry to industry, as did the level of discomfort testing the concept.

Big Brand Adoption

With 22% of global consumer packaged goods companies planning their marketing this way, it’s becoming increasingly normal to start from scratch. Whilst an entire top down, bottom up approach may seem a scary initiative, it’s surprising what can come of the insights, the questioning and the process of team collaboration (admittedly in the right environment).

Top Down

The planning methodology we use is brutally simple. Yet, it questions everything.

We start with success. How does success come about? What do we need to excel at to get there?

The critical piece (often left out) is what this means for your organisation. With an action plan and budget aligned to success - we question everything else.

We question things that have habitually been done. We question programs of work not aligned to success. Validate and Quantify. And, then we remove all other activity. This takes courage. Not only does it place extreme pressure on building a collective ambition, but a path to success that the entire team buys into – whether it’s a team of 5, 20 or 80+.

Bottom Up

Automation, AI and Data Insights together are driving marketing sophistication across many fronts. As with all marketing investment, to derive the most value, we need to ensure activity is aligned to the organisation's profit drivers or KPI's. A lack of budget visibility across teams can lead to evaluation and savings being missed.

A simple and yet obvious way to start is by reviewing key spend lines, the one's where the risks of failure are greatest, or review by value of the cost line to ensure value is been extracted (not cost).

Whilst a full zero-based budget maybe time prohibitive, it’s still possible to apply the principles from a top down and bottom up review to ensure marketing planning and resource allocation is questioned and validated.

Prepared for tough questions

If nothing else, it prepares the team for conversations with the broader business. In my experience it encourages new thinking and gives license to challenge, particularly in organisation’s where change is a challenge.