Budgets Versus Targets
All the signs are there….our economy is slowly on the rise. I’m reading stories about things like a projected 8.7% increase in advertising this year, and talking to happier media people every day.
Many of the stations I’m talking to are telling me they’ve hit budget three months in a row. But when someone tells me they are consistently at 100 or 101% of budget, I often wonder if they’d still be at budget if the budget was higher. I think they would.
Many of our budgets were set during less optimistic times. And the problem I see today is not that we are setting our targets too high and missing them, but that we are setting our targets too low and hitting them!
If you set a 5% increase in your budget, but the market is up 8%, you’re actually falling behind.
Budgets are usually set for accounting purposes, and keeping them low helps keep our costs low as well. But there should be a difference between your budget and your target.
Targets can be a great motivational tool to push people to new heights beyond their comfort zones. Targets need to be fluid, not fixed like budgets, to ensure maximum performance and productivity. See the ‘Even Eagles Need a Push’ three-minute video at this link;
The thrill of soaring can be greater than the fear of falling.
Randy’s What If; What if you had additional incentives for achieving realistic targets that pushed your people beyond your budgets?