Posted on: February 23rd, 2010 by Reuben Turner

We’re talking to a few clients about their acquisition plans at the moment. The perennial question is of course, ‘how should we spend our budget for the best return?’. Never as simple as it sounds when you take into account volume versus value, long-and short-term objectives and a shifting marketplace (and a recession).

Not many people ask the creative director’s advice about acquisition planning. Fair enough.

But if they did, I’d show them this diagram. It’s pinned to Roger Lawson’s desk and it came out of a discussion we had about budget allocation. The idea is nicked wholesale from Nassim Nicholas Taleb’s Black Swan, and it’s a plan for the ultimate risk-free investment strategy. Spend most of your money on rock-solid, safe-as-houses stuff. Doing that protects you against the risk of new initiatives not working. But you also need to spend some on the new, the untried, the risky. Because then you’re protected against the risk of missing out on the Next Big Thing.

Roger’s amendment to the diagram was a fairly crucial one. He’s the one who crossed out ‘risky’ and put ‘fun’.

Because, after all, some of the work we do, we should do because it just feels right. It’s exciting. Like any Dragon’s Den entrepreneur, you run the risk that your wide-eyed enthusiasm is completely misplaced and you don’t make your money back. But of course, there’s also the chance that you’ll hit on something with real potential. Something that’ll be the new ‘safe as houses’ in a year or two.

So when you’re planning your budget, don’t forget to keep some fun money aside. It’s risky not to.