Follow the Money: Budget.xls > Strategy.ppt

If you want to know a company's actual strategy, don't read the slide deck. Look at the budget.

I've sat through hundreds of strategy presentations in my career. They all look roughly the same: ambitious vision, impressive graphics, carefully curated priorities that somehow include everything important. But the slide deck isn't the strategy. It's theater. The real strategy lives in a spreadsheet. Specifically, the one that shows where money and headcount actually get allocated.

This distinction cost me my job. Twice.

In 2013, I was laid off from T-Mobile. That morning, I attended an all-hands meeting where the CMO laid out a new strategic direction, one that would fundamentally reshape how the company competed. It was bold, risky, and expensive. "Executing this strategy is going to cost a lot of money," he explained. "In order to fund this, any roles that aren't absolutely required for us to execute this new strategy are being eliminated."

It was painful, but it was also coherent. The company was aligning its investment with its declared priorities. I understood why my role was eliminated, and I watched from the sidelines as their strategy caught fire and transformed an industry.

That experience taught me something I've repeated throughout my career: strategy isn't what a company says it is. Strategy is what a company spends its money on.

"Strategy isn't what a company says it is. Strategy is what a company spends its money on."

Ten years later, in 2023, I was laid off from HERE Technologies. Same pattern: an all-hands meeting just before I got the news. Our Chief Product and Technology Officer walked through priorities for the coming year. I remember being impressed because he did something unusual. In addition to everything we were going to do, he named things we were going to stop doing. That takes courage.

My initiative, Marketplace, was prominently featured as a core strategic priority. So I felt good. Then, one hour later, I was told my position was eliminated. My boss explained that the budget for Marketplace had been cut by fifty percent (!), and the only way to make the numbers work was to eliminate my role.

I asked him a question I already knew the answer to: "How is this a strategic priority if we're only giving it half of last year's budget?"

He agreed. But this was what the company had decided.

I even emailed the CEO to highlight the disconnect. No response.

HERE declared that Marketplace was strategic. Then they cut its budget in half. Which means it wasn't strategic at all. The slide said one thing. The spreadsheet said another. Follow the money.

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This same pattern plays out at every altitude.

Earlier this week, I taught a case study on LEGO to my strategic management students at Seattle University. In the early 2000s, LEGO nearly collapsed. Not because they lacked ideas. They had plenty: theme parks, clothing lines, video games, jewelry, etc. Each opportunity was individually defensible. Collectively, however, they starved the core business of focus and resources.

The turnaround came when Jørgen Vig Knudstorp arrived and ruthlessly cut back to the brick. The company was saved not by adding more priorities, but by finally subtracting them.

Smart people, obvious opportunities, near-bankruptcy from lack of focus. The discomfort of saying "we're not going to do that" felt worse than the slow bleed of overextension until reality forced the choice that leadership wouldn't make.

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But it's not just about underfunding declared priorities. Sometimes the pathology shows up as a refusal to acknowledge trade-offs exist at all.

Earlier in my career, I was at Qualcomm working on a product launch for personal TV. We were running up against hard constraints, and I asked my boss a simple question: "What's our top priority—launching a nearly bug-free product, or launching on time?"

Her answer: "Both."

I chuckled. She didn't.

"Both" isn't a prioritization. It's a denial that prioritization is necessary. It treats resources (time, money, energy, attention) as infinitely malleable. As if we could simply will our way past trade-offs through effort and commitment.

We can't. Resources are physics, not attitude. Declaring something a priority without funding it accordingly, or refusing to choose between competing demands: these are both symptoms of what I've come to call the Infinite Capacity Fiction. The organizational belief that resources are endlessly malleable, that we can always do a little more, that trade-offs are optional if we just try hard enough.

"The Infinite Capacity Fiction: the organizational belief that resources are endlessly malleable, that we can always do a little more, that trade-offs are optional if we just try hard enough."

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So why does the Infinite Capacity Fiction persist? These aren't stupid people. The executives at HERE, at LEGO, at Qualcomm were experienced, intelligent leaders.

I think it comes down to discomfort.

Saying "we're going to fund X by not funding Y" requires someone to absorb the loss. Saying "we can do both" feels optimistic and collaborative in the moment. The first creates immediate conflict. The second defers it. Leaders optimize for the meeting they're in, not the quarter they're committing to.

And accountability is diffuse. When everything is a priority, no one owns the trade-off. If Marketplace fails at half its budget, was it the strategy or the execution? The ambiguity provides cover.

The fiction works until it doesn't. Companies get away with incoherent prioritization for a while because people absorb the cost through overwork. The system doesn't break visibly until it really breaks.

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If you're a product leader reading this, you've probably felt the weight of this pattern. Maybe you've presented a roadmap and been asked to "add a few more things" without additional resources. Maybe you've heard "both" when you asked for prioritization. Maybe you've seen your initiative on a strategy slide while watching its budget get cut.

Here's what I want you to know: that's not your failure to plan better. That's you absorbing the cost of the Infinite Capacity Fiction, your organization's unwillingness to prioritize.

"That's not your failure to plan better. That's you absorbing the cost of the Infinite Capacity Fiction."

I wish I had a tidy framework for fixing this. I don't. Counteracting it depends on factors largely outside your control: personalities, politics, organizational culture, executive willingness to feel the discomfort of real choices.

But I can tell you what changed for me.

Late in my time at HERE, before the layoff, I was in another impossible situation. A senior executive had convinced leadership that we could rip and replace our entire billing and provisioning infrastructure in an unrealistic timeframe. None of the people who would actually do the work had provided supporting evidence. All of us were saying the same thing: this isn't possible.

Earlier in my career, I would have tried to make it work. I would have pushed, pulled, worked nights and weekends, tried to be the hero who somehow made impossible math pencil out.

This time, I didn't. I simply named it for what it was: a dream unfounded in reality. When I got pushback, I restated my position. The problem didn't get resolved. But I wasn't the one pretending anymore.

That's the shift. Not winning the fight (you often won't). But refusing to carry weight that isn't yours. Putting the trade-off back where it belongs: with the people who have the authority to make it.

At minimum, you'll know what you're dealing with. And you'll stop blaming yourself for failing to solve a problem that was never solvable from your position.

Follow the money. That's where the truth lives.

Break a Pencil,

Michael

P.S. Know someone who's been absorbing the cost of the Infinite Capacity Fiction? Share this with them. Sometimes naming the problem is the first step toward not carrying it alone.