Tuesday, May 17, 2011

Build contingency into your budgets, plans

I learned a communications management trick while I was working in the public sector. The doomed organization I was in was plagued by a host of problems, both internal and external. The institution we were fundraising for was in serious trouble. Our leadership spent more time fighting with each other than fighting for the future of the organization. We seemed to change direction every day. The question I often asked myself was how could I plan a communications program in such a wildly changing environment?

A case in point was a project I and a colleague worked on for nearly three months. It was a major piece in the communications program -- a number of other things depended on it. Then one day the boss came in and told me to change the whole thing. We had to start over. All that hard work was wasted.

The key to planning a communications program that is based on shifting sands is to create a contingency in your budget. This came home to me during budget time one year when I couldn't figure out what would happen to our organization at the end of the week let alone a year down the road. Our budgets had to be exact. Everything had to be spelled out. My solution was to build into every budget and every project a 15% contingency. If we spent $100.00 on X, then I'd also budget $15.00 for contingency. As well, I added capacity to non-financial things, too -- hours, infrastructure, staffing, etc.

When things changed (which they did until the day I got downsized), I had some wiggle room. I could move some money around. I could move some resources from here to there.

And the best thing about it was that it was easy to sell. Since I based it on a formula -- 15% -- and not just an arbitrary amount of cash, people respected it.

Try this yourself in your next project or at budget time. And if you get any flack, tell them some marketing guru somewhere said it was "a common benchmark". Then put up your feet and have a cup of tea!
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