A Strategically Tactical Budget....

Have you ever had to deal with budget cuts? If so, you will know that this is an area that requires some hard decisions – and maybe some battles. But how can you be sure that you can keep a budget for the most valuable work? One answer is to separate different types of work and the budget that is allocated to each. The most valuable way of categorising work is by differentiating between tactical and strategic projects.

 

Examples of tactical work include ad testing, product evaluation, and customer satisfaction trackers. These are all valuable items that can be seen to remove risk, or that help to identify problem areas, and therefore contribute value to the business. To spend £20,000 on testing ads for a £1million campaign is a no-brainer. But the risk that you are off-setting, whilst more than the cost of the research, is still relatively low.

 

In contrast, this area is often more hit and miss. It includes work such as exploring consumer trends, or undertaking speculative qualitative work to look for new ideas. Sometimes it may not deliver anything, but at other times it can change the whole direction of the company. To get something wrong at the strategic level could reduce your market share by several percent – which to a major company might mean a loss of £tens of millions!

 

When budget cuts are needed, the tactical work is often the last to be cut, because even though it may be of a lower value, that value is easier to identify. By simply splitting your budget into tactical and strategic, it is far more likely that cuts will be proportionate in both areas. Having strategic work as a separate line will force you (and others) to think very carefully before cutting it – because its overall value is so high, even though it may be harder to prove the value of each individual element.

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