07.13.04-1 FRAMING, BUDGETING AND THE LA LAKERS

Stop and think about this for a second... assume you’re the coach of the LA Lakers. The owner comes to you and says coach I want you to tell me before the game starts, what the final score will be. Further, I need you to tell me which players you’ll play and how much playing time they’ll each get along with their points scored, number of fouls and turnovers. Also, I want to know every play you’re going to use including the order of the plays utilized. Last, I need you to tell me this by quarter - and your job depends on how accurate you are at predicting this.

As farfetched as this may seem, it illustrates the expectations and practices which drive traditional advertising and marketing doctrine. Expectations described by the requirement to budget in advance all campaign activities down to the pennies and practices dominated by rigid planning and execution methodologies which are nearly impossible to modify during the course of a campaign. Based upon these expectations marketing professionals have evolved the competencies necessary to support this doctrine. I’ve described these competencies as the Six Critical Vulnerabilities Found in Traditional Marketing Organizations.

It may seem as if embracing uncertainty means throwing all fiduciary caution to the wind. By suggesting that we have to embrace uncertainty in order to maximize effectiveness I am not saying that we need to decrease financial accountability. Instead of BUDGETING we talk about FRAMING which is a different approach to allocating and managing enterprise resources.

Budgeting tends to allocate and manage resources on a micro scale, framing at a macro level. Rather than talking about a campaign budget we talk about the campaign frame. budgeting assumes we work in a predictable stable environment. Framing assumes we operate in an unpredictable, volatile environment. Budgeting hampers the ability to improvise and adapt. Framing allows maximum agility. Budgeting is driven by quantitative measurements. Framing is driven by human, subjective interactions.

The components that make up a campaign frame are: an objective, an estimate of time to accomplish the objective, an estimate of the total resources necessary to achieve the objective and a calibration process that continuously evaluates progress. The critical difference is that the calibration process replaces the budget process. Results are judged not on budget accuracy but on campaign effectiveness. Calibrations allow campaigners to evolve and adapt to changing threats and opportunities in real time.