Thursday, February 4, 2010

What's Your Budget for Failure?

Budget for Failure

The year was 1994 and something called a job board was being
launched- specifically CareerMosaic, named after the web browser credited for
popularizing an old thing called the Internet.

In a meeting with top executives, Bernard Hodes, a brilliant marketeer and the CEO of the agency that bore his name, shared his rationale for creating the pricing structure for his new category of recruitment advertising.

"We’ll price the postings as a $100 add-on with any newspaper ad” he said. (At the time a 1” by 3” classified ad in the NY Times on Sunday was probably about $1,500.) He continued, “Who doesn't have an extra $100 to experiment on a new media?”

Unknowingly, he was establishing a precedent for what is today a $6+ billion business. (Factoid- CareerMosaic was eventually sold to which was eventually bought by CareerBuilder, as of today one of the 2 giant oaks still standing.)

However, equally important was his underlying reminder that everyone has a budget for failure- aka experimentation ... a lottery ticket fund that smart people can sometimes leverage into big payouts.

I call this a budget for failure because that way if the outlay fails to generate a positive return on its investment, at least you can take solace from having known it in advance.

For me, it is the amount of money I set aside for a potential bad hire- someone who doesn’t meet my exact requirements but has a kernel of an idea that might take me new places.

It's important because the BRANDEMiX brand is a culture of ideas and execution.

Also included in my failure budget is an amount I can spend on something I’ve already tried that didn't work out. That’s also important to our brand since one of our brand pillars is “solutions that leverage technology.” In the fast changing digital world, though experience is a great teacher, it is not necessarily a great predictor of future outcomes.

Lastly, my budget for failure includes spending time and effort (time is a dollarized investment, effort is not), on new business pitches that are outside of our core capabilities. At BRANDEMiX, we are a culture of continuous learning and we often learn from succeeding at new challenges.

In case you haven’t yet drawn the connection, my budget for failure is also part of my plan for success. Without funding for my failures, I am unable to succeed at delivering my brand.

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