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Building Better For 2013

10-3-2012

 Remember vinyl records? Do you know why the larger records, called LPs, had the small center-holes, and the smaller records, called 45s, had the larger holes?

I discovered the reason when an old record company press room foreman shared the answer to the mystery of the holes with me. He explained that 45s were actually manufactured with the same size holes as LPs, but they were sent to a separate press to punch the holes bigger.

The reason, he said, dated back to the turn of the 20th century. RCA Victor commanded the lions share of the phonograph market and decided they could command the lead in the recording industry as well by producing records with larger holes and producing phonographs with larger spindles. RCA had such a commanding lead in phonograph sales, that all of the other record companies had to eventually follow suit, punching the larger holes in their records.

Every year I recommended deleting the person, the process, and the equipment that punches those larger holes from my operating budget, said the foreman. But every year the union and management saw fit to leave it in. Maybe they had shares in the company that sells those plastic hole reducers, he mused.

Budgeting mistake #1: Assuming last year was a good benchmark

Many broadcasters who are in the midst of planning and budgeting for their new fiscal year will make that same mistake. Many will instinctively assume the process begins by using previous years as acceptable bench marks. Doing so makes the dangerous assumption that what you did last year was just fine, or that you reached your full potential. Seldom is that the case.

A zero-based planning and budgeting process allows you to think creatively about what could be, rather than compounding the mistakes or shortcomings caused by focusing on what was.

Zero-based budgeting and planning involves starting with a clean slate; not encumbering your thoughts with accounting practices or entitlement mentalities, but building the perfect plan or department from the ground up.

Zero-based planning and budgeting opens a whole new world of possibilities, shaking up processes and targets which may have gone stale or have become complacent over time, like punching bigger holes in 45s.

Budgeting mistake #2: Aiming too low
 
Behold the turtle, for it makes no progress until it sticks its neck out.

There is no doubt, the turtle is more safe when its head is tucked in its protective shell. Many radio managers protect their job security by creating "safe" budgets that keep them in their shells.

And CEOs compound the problem by offering incentives for managers who "over achieve" on their low-balled targets. We actually incentivize them to target low!

Its like letting politicians vote on their own raises. Duh! Of course theyre going to vote to increase their salaries, or in the case of insecure or bonus-hungry managers, theyll target low.

Chicagos visionary architect, Daniel H. Burnham, is quoted as saying Make no little plans; they have no magic to stir mens blood. Make big plans; aim high in hope and work.

Or, as Henry Ford put it: Whether you think you can, or think you cant, you are right!

Its time our industry started to think we can, and to come out of our protective shells.

Wayne Ens is the president of ENS Media Inc. and producer of SoundADvice, the radio e-marketing system and advertiser seminar that is persuading local advertisers across North America to drop their print advertising in favor of a radio-Internet media mix. He can be reached at wayne@wensmedia.com 




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