It’s been a tough year all-round and as creative businesses begin putting together their plans for 2021, how should those in leadership positions go about balancing financial realities with an inspiring vision of the future?
At national level, that’s a challenge the Prime Minister and Chancellor Rishi Sunak have faced in the past couple of weeks.
In his virtual Conservative conference speech on 6 October, Boris Johnson attempted to set out a vision for what life could look like when all this is over: “Even in the darkest moments we can see the bright future ahead. And we can see how to build it and we will build it together.”
Meanwhile, Rishi Sunak is under pressure to provide more support for businesses on the one hand, while at the same time trying to reassure party members that he’s already thinking about how the measures already undertaken will be paid for in the years to come.
In his conference speech, he had to send a message of caution:
“We have a sacred responsibility to future generations to leave the public finances strong, and through careful management of our economy, [we] will always balance the books… If instead we argue there is no limit on what we can spend, that we can simply borrow our way out of any hole, what is the point in us?”
For balance, it’s worth saying that this is the traditional dynamic between Number 10 and Treasury whichever party is in power: one wants to announce exciting, popular policies; but the other has to say, well, yes, but how are we going to pay for it?
When you run a business, though – at least if you’re doing it properly – you either have to perform both roles yourself, or get an accountant to support and challenge you.
An inspiring vision is important because it keeps everyone motivated, working hard, working together, at the top of their game.
You’ll sometimes hear people talk about ‘BHAGs’ – big, hairy, audacious goals. The most famous example of that, and maybe the first one ever, was John F. Kennedy’s commitment to landing an American on the moon before the 1960s were over.
The BBC podcast Thirteen Minutes to the Moon has a brilliant episode on how effective this was in getting the best out of people and uniting them behind a common goal.
The point is, it’s not about meaningless mission manifestos or slogans – I can’t be doing with all that personally – but there are some great examples of vision statements in this HubSpot article. I really like the one Microsoft had when it started out: “A computer on every desk and in every home.” They did it, too.
In practical terms, setting a vision helps with planning. After all, until you know the destination, you can’t start to plot a route, avoiding dead-ends and detours on the way.
It also makes prioritising easier. Does this project contribute to the vision? No? Then it can probably wait.
At some point, you need to turn a vision into goals for the next month, quarter or year; and then again into specific, measurable targets; and finally, into items on everybody’s to-do lists.
Budgeting makes the vision possible
I get a bit frustrated when I hear people complaining about ‘bean counters’ compromising creative projects. It was going to be great, they say, and then the accountants got involved.
Accountants and finance directors aren’t spoilsports. We get as excited by a compelling vision as anyone else. But our contribution – what you’ll thank us for in the long run – is asking questions, challenging and keeping things on track financially.
After all, without someone championing financial responsibility, the business might not survive long enough to achieve its vision.
BHAGs or not, you need to keep the lights on, avoid losing talented staff and retain the trust of any stakeholders, such as investors, lenders and board members.
Detailed, rigorous business plans and budgeting might feel restrictive but used well, they actually reduce the burden. When you’ve already considered the worst-case scenario and planned for it, you can stop worrying about it – or at least worry about it a bit less.
Something that’s often overlooked, too, is that clarity and transparency around numbers can motivate the team.
The most successful businesses, in my experience, are quite open with staff about financial challenges and targets. It helps focus their minds on generating leads, making sales and the need to maintain productivity.
And, if it has to happen, helps them understand why cuts and efficiency measures might be necessary to secure the future of the business.
Let budgeting shape the vision
You could go one step further and start with the numbers before you even think about a vision statement.
Look with clear eyes at where you’re spending money, what makes you money and which clients are most lucrative. You’ll find the options narrowing and opportunities presenting yourself.
Let’s say you’re slogging away creating ad campaigns for widget manufacturers in Wigan, because that’s what you’ve always done.
But the planning and budgeting process reveals that your highest revenue per customer (ARPC) is with digital widget developers in Darwen.
And come to think of it, aren’t those also the clients you and the team enjoy working with the most?
So you decide your vision is (look, I’m not a copywriter) “To tell the world about the quality of the UK’s digital widgets”.
The clarity and purpose inspires your team. It wins over clients who are convinced by your specialist expertise. And, of course, the increase in revenue makes your accountant very happy indeed.
Get your agency ready for the year ahead with business planning advice from Alchemy.