The never-ending budget

I delivered a presentation at Australia’s Design Leadership 2019 conference titled ‘The Business Case for Design’. At the heart of it was a simple concept I called ‘the never-ending budget’. Some people in the audience reached out a while later to tell me they’d since used this method successfully. Hopefully it works for you too.

I was banging on about website projects but the principles are more broadly applicable. Just about any organisational project related to design, marketing and innovation can do with a never-ending budget.

So many awesome and well researched ideas are woefully underfunded and are hamstrung from day one. For those projects that are funded properly, even when the results hit it out of the park, many will have their funding cut prematurely. New budget cycles, executives who don’t appreciate the commercial value, etc.

Making a fast and proper start, and then never stopping, is basically how the never-ending budget works.

The deck is below. Here’s the summary:

Start with quick wins 

I gave an example of securing a small pilot project budget for an organisation with mid 7-figure online revenue. By analysing the data and understanding the most impactful design levers (conversion rate and average transaction value), within four weeks the design wasn’t just finished – the design was finished, built and the pilot was live. After seven weeks, the pilot had delivered a 20% revenue increase and 12:1 return on investment. The final week, bringing the pilot to a total of eight weeks, was dedicated to executive reporting and bulletproof commercial recommendations for the next project phase.

There was so much more that could’ve been done design-wise in the pilot. The duration was a fraction of what it could’ve been, even for a pilot. However – the longer the project, the less chance of it being funded properly coming from a starting point of zero. The project was short in duration, but critically, it was funded properly. Short term proper funding and resourcing is far more likely to succeed than long term underfunding.

The pilot was about moving quickly, earning trust, demonstrating value, and most importantly – communicating the success to an executive team with live data dashboards and regular executive revenue reports. Time that would’ve otherwise been dedicated to more design was invested in telling the story and reporting clear metrics with direct commercial language. Words matter – not ‘Project Updates’, these are ‘Revenue Reports’.

Roll this momentum into a larger, multi-year programme of work

A successful pilot gives permission to set realistic commercial projections for a bigger project business case. If a pilot project lifts revenue by 20%, it’s fairly straightforward to show how this can apply more broadly by focusing on the specific reasons why revenue is up 20%. If conversion rate is up by x% and average transaction value up by y%, make some multi-year projections to forecast the success of a more broad and long-running scope of work.

Don’t include ‘what ifs’ – like an unexplained increase in mobile traffic that also contributes to a revenue increase, for example. Speculative metrics can kill a business case. If it wasn’t proven in the pilot, it’s not welcome in the business case. Keep the formula simple and easily defendable.

I find it helps to budget in years but to break costs and commercial targets down to weeks. For example, if a $6 million budget is required for a three year scope of work, the project is costing $38,462 per week. If the project’s commercial objective is revenue growth, how can the project be phased and prioritised to deliver revenue growth as rapidly as possible, and deliver multiples of $38,462 per week in return? Returns should be evident well before the end of the three year term. The plan for rapid returns should be in the business case.

Relentlessly communicate the wins

Just like the pilot, the mission is to achieve and communicate tangible commercial outcomes as rapidly as possible.

Dashboards, data analysis, executive reporting, film production, graphic design – whatever is required to tell the story of a project’s success should be included in the project budget. The resourcing for communication and storytelling is non-negotiable.

The pilot was a success. The business case is approved. The project is underway. The budget is safe, right? No way. This is a risky moment. The afterglow of the pilot is fading, the project’s burning $38,462 per week and on day one it’s contributing $0 to the bottom line. Sprint to get the first wins live and report on the results relentlessly.

Don’t stop. At least quarterly and ideally monthly or fortnightly, it’s your job to ensure everyone inside the organisation knows exactly what your project is achieving.

Once this rhythm is established, as long as the project is succeeding commercially, the budgeted project term generally becomes irrelevant. Budgets continue to roll forward, new project scopes and roadmaps are created, and the organisation appreciates that this project isn’t a cost – it’s an investment they’d be crazy to stop. Where else will they get 12:1 returns?

To read more, view the deck here or download the PDF:

The never-ending budget. It’s simple idea, yet it’s seldom done well.