Here’s What Not to Fund

In lean times, determining what not to fund is important. But what is important? And what’s urgent?

Some trade-off decisions are easy — do you want ice cream or brownies for dessert? Both choices are yummy and it’s simply a matter of preference.

When it comes to cutting marketing budgets, trade-offs get more complicated. Like a game of Jenga, deciding which budget blocks can be safely removed without everything crashing down can be nerve-wracking. Stakeholders with differing priorities combined with competition between long-term or short-term investments make choices difficult. Where should you cut?

In lean times, determining what not to fund is as important a strategic decision as where to allocate budget. Finding the least risky, most favorable spots for cuts requires answering two questions:

  • Importance: How does this budget item contribute to our strategy?
  • Urgency: How important is it that we act now?

Determining Important Vs. Urgent Marketing Efforts

I was first introduced to this decision-making method in the classic book “The 7 Habits of Highly Effective People” by Stephen Covey. To help people become more productive, Covey leveraged a 2×2 time-management matrix attributed to American president Dwight D. Eisenhower. This matrix categorizes tasks into quadrants based on importance and urgency. Important items foster your values, purpose and strategy. Urgent items require immediate attention.

Eisenhower and Covey stressed highlighting the important because when things get hectic, the alarm of urgency often overrides essential values. Like time, business budgets are finite, and filtering funding decisions on scarce resource allocation into quadrants based on both importance and urgency will result in better results.

Related Article: Messaging During Recessions: 3 Opportunities for Marketers

The Importance of Importance

Ignoring importance during the periodic (and inevitable) lean times is a mistake. I’ve weathered several of these challenging periods during my career and coached clients through others, some deriving from macro-economic trends, others specific to a business. Two destructive budget-cutting methods are the “haircut” where everything gets shaved the same amount (e.g., taking 15% out of every program or department) and the impulsive move to cut everything except short-term programs.

The first is lazy. The second should only be undertaken when the company is in immediate threat of going under.

For companies that expect a return to growth, consistent (if smaller) investments in the future are imperative. Otherwise, you prolong and deepen the pain because you will be further behind when the market turns up again. Long-term marketing investments are especially important because marketing paves the road that sales will eventually drive on. If your business plan calls for revenue growth tomorrow, you must continue build the conduit for delivering it today.

Related Article: Chief Marketing Officers Share Priorities Amid Economic Stress

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