Funding for Improved Business Agility

The Funding Challenge

As a young child, you might have played an engaging game called Hungry Hungry Hippos. Thirty marbles were placed in the middle of the game board “arena” and four players vigorously grabbed for them with a cute plastic mechanical hippopotamus mouth. Each game was a blast of 20 seconds of bursted energy leaving everyone depleted of adrenaline and breath. The one with the most marbles won!

Annual funding cycles can feel like a game of Hungry Hungry Hippos. A small group of leaders go to an annual offsite to use their finely honed negotiating and political skills to secure as much funding for their departments and initiatives; to take all the marbles! 

While there is nothing inherently wrong with gathering departmental leaders into an intense offsite to redistribute funding, there are also limitations that shouldn’t be overlooked. Politics and pet projects overtake strategic priorities, baselining on last year’s budget for next year biases existing programs over new programs, and it tends to drive competition (win/lose) over co-creation (win/win). Furthermore, an annual timeline over-allocates funding to some programs while starving others with unknown changes occurring throughout the year. 



Business agility means connecting a clear vision with agility in execution. Locking in funding based on last year’s numbers adjusted for new politics is a poor recipe for business agility.

Four Actions to Improve Funding for Business Agility

An organization’s values, goals, and objectives are tied to the budget and funding. Leaders need to rethink their role as a little less about applying their own expert knowledge and a little more about catalyzing the organization to make better funding decisions. 



We recommend four actions to improve funding for business agility:

1. Plan with diversity
2. Balance the portfolio
3. Invest in marginal gains
4. Inspect and adapt
   

Action 1: Plan with Diversity

Agility is based on solving complex problems through collaborative diversity. Studies show that while the joy of collaboration reduces when diverse perspectives are added, the end-results are improved. People with different backgrounds, priorities, values, perspectives are harder to “get along” with, but add more value to the outcomes. They reduce the echo chamber of like-mindedness and confirmation bias (or or the tendency to interpret information that confirms or supports the beliefs or values individuals already hold) by challenging group-think and opening new opportunities.

When funding decisions are born out of like-minded individuals, that group may overlook problems and solutions required to properly consider their funding or worse, they may outright ignore important information. Homogenous teams may severely misunderstand complexity or assume away compelling customer feedback. 

Include more people with diverse perspectives in the budgeting process. Focus on diversity in professional experience, tenure in their role, geographic location, role type (e.g. technical, sales, and operations), gender, and culture as early as possible. Budgeting across departments rather than within departments. Engaging multiple levels within the organization to be involved in the budgeting process. As funding options are developed and especially in any off-sites make sure you have diversity and create an environment that supports the sharing and valuing of different perspectives.

With diversity, you gain the perspective of people who may be closer to the problems and potential solutions but perhaps more importantly you gain the benefit of critical questions being asked that would otherwise be left unidentified and unanswered by a more narrow group of experts. Diversity broadens the scope and enables more  aspects of funding to be considered.



As a leader you have to not only bring diversity into the room but more importantly you have to harness its power by celebrating unpopular, challenging, or vastly different perspectives.

Action 2: Balance the Portfolio

Even if you have a diverse set of people they may still focus on what is known and comfortable. They may fixate on their confidence in knowing things like “this is what the customer wants” or “we only have a four month window to bring this to market”. This fixation though causes the unknown to be overlooked; things like “Will our sales people be able to sell this?” or “will the supply chain actually support this”? Sometimes the answer is, “We don’t know.” 



Business agility means navigating a complex, uncertain and rapidly changing landscape that requires adaptability and taking risks. So while much of the budget may be allocated for “keeping the lights on” operational work along with new strategic programs/projects, also consider percentage allocation on creative experiments and exploring the unknowns. Google deploys a 20% time for each employee to explore and experiment with creative projects. Many tech companies fund “hackathons” where they may spend a week focused on creative endeavors.

Action 3: Invest in Marginal Gains

Business agility itself is a change process. If we expect leaders to think and act differently, budgets to be allocated differently, sponsors and stakeholders to be more engaged, teams to be more self-accountable, then we need to equip them properly for this change. 

Human change takes time. Organizational change takes more time. Don’t expect to hit a grand slam and win the game in a year. Rather, consider investing in marginal gains every year. Like financial investing, a diversified portfolio with re-investments year-after-year results in doubling your money after a few years. The same is true for organizational change. A single investment may have a small impact, but re-invested year-after-year, program-after-program, will make substantial improvements over time.

Action 4: Enroll, Inspect, and Adapt

Once budgets are set for a year they can be weaponized. The winners of the funding cycle have the authority to spend and the losers have to just live with it. Winners celebrate, losers grumble. 

A danger of intense annual planning is that the rest of the organization may have been shut out of the process so they don’t understand what went into funding. As a result the organization fixates on just spending up to their budget instead of staying focused on the overall outcome of the funding. The organization may not challenge themselves with questions like “should I continue to spend my budget?” because they are so focused on spending within the enforced budget.

To solve this the leaders who did participate in the funding must enroll the rest of the organization to understand WHY the funding choices were made. Once people are enrolled in the decisions they are more likely to focus on the business outcomes. With diverse participants and a continued focus on the unknown, communicating the WHY will certainly be accelerated. 



Funding decisions quickly age so they must be challenged over time. Constantly inspect if funding is producing the desired outcomes and the expected impact. You must keep the organization focused and aligned continuously.