Show me where the money moved

Ask a leadership team whether strategy should adapt to new information and you will get a room full of yes. Ask the same room where the money actually moved this year, and the conversation gets more interesting.

That is the genuine test of a living strategy. Not the language in the document, nor how recently it was refreshed.

In most large organisations, budget works as a ratchet. Each unit starts from what it got last time, argues for a bit more, and defends the base. Strategy paper says the growth is in a new segment. Allocation says the growth is exactly where it was three years ago.

Twelve months later everyone is politely surprised that the new segment did not take off.

Why does this happen to sensible people?

Because reallocation is personal. Moving budget away from a business unit means moving it away from a colleague who has done nothing wrong. Even worse, it carries real reputational risk, because innovation and growth initiatives are uncertain.

The annual cycle gives everyone an excuse to avoid hard decisions and hard conversations. We agreed this in October, we can revisit it next October. So the strategy adapts on paper whilst the firm carries on funding its own history.

If you want a strategy that lives, and that is truly dynamic, make the money follow it:

1. Hold back five to ten per cent of the budget at the start of the year. Release it in tranches during the year, based on market evidence rather than the loudest voice.
2. Put reallocation on the agenda every quarter, and make the default question which two things stop, not which one gets added. Again, draw on market evidence.
3. Give every large initiative a sunset date and a written condition for renewal. Absence of bad news is not a condition. Defining this in advance is crucial for minimising the sunk cost fallacy.
4. Publish the moves. If the organisation cannot see resources following evidence, it will keep planning for the usual. Thus, words and deeds become one.

Executives sometimes worry this creates instability. My experience is the reverse. Small, frequent shifts get absorbed without much drama. What rattles an organisation is the restructure that arrives later than it should have, most often after the majority has already gone on auto-pilot.

There is a personal version of this too. Your calendar is the second budget, and it is the one your people actually read. If a priority sits in the strategy and never appears in your diary, they have already worked out how seriously to take it.

So take your current strategy and, next to each priority, write what you moved this quarter. Money, people, your own hours. Where that column is empty, you do not have a priority. You have an intention.

And an invitation to reflect.

Strategic Clarity blog post mini-series

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Show me where the money moved

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When to commit and when to explore

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