The budget follows the problem to the wrong address.
Carsten Christiani
Look at where your company spent its unplanned money last year. Most of it probably went wherever something looked broken. The team that was drowning got a hire, the process everyone complained about got a new tool, and the thing people had started calling "culture" got a workshop and, a little later, a reorg. Every one of those was a sensible answer to what you could see. The catch is that what looks broken is rarely where it is made, so the money tends to arrive, quite reliably, at the wrong address.
Anyone who has lived with a leak in an old house knows this. The stain on the ceiling is almost never under the pipe. The water runs along a beam and comes through wherever it finds the lowest point, and you can repaint that patch every spring for years without getting any closer to the leak. A lot of company problems behave the same way. The water is a decision that keeps getting made badly somewhere upstream, and the beam is whoever can be asked to absorb the consequences without saying no.
To be fair to the hire, sometimes a team that is drowning is simply short of people, and adding one fixes it for good. The problems worth reading backwards are the other kind, the ones that keep coming back in a different form. A decision goes wrong upstream and what shows up first is a slipped launch. Later the same thing shows up as an overloaded team, then as a hiring request, and eventually as something people describe as a culture issue. By the time it has a name, it has usually moved twice, and every place it stopped has picked up its own line in the budget.
It keeps moving because the place where it is made doesn't feel it. Whoever makes the decision is rarely whoever pays for it later, and the loops that would carry the cost back upstream are among the first things cut when time or money get short. A customer's complaint gets summarised into a number on a slide, and the number no longer says what the customer actually said.
A company can carry on like this for a surprisingly long time, because it loses information long before it loses money. The people downstream stop mentioning what the decision costs them, since mentioning it has never changed anything, and the people upstream hear the silence and take it to mean things are fine. Everyone is behaving reasonably, which is part of why it lasts.
Outside help usually gets pulled into the same pattern. The brief is drawn around the stain: sort out this team's workload, and leave the rest of the house alone. I've had that brief more than once, and I understand why it gets written, because the stain is what everybody can see. But it means the budget keeps paying for the stain while the pipe keeps leaking, and next year there is a new stain somewhere else that also looks as if it needs a hire.
The useful part is that the budget can be read backwards. Each line that treats something points at a symptom, and each symptom points one stop further upstream. When we start working in a company, that is one of the first things we do: take what the money is treating and walk back along the line, stop by stop, until we reach the decision that keeps producing it. The question our diagnostic uses for each stop is this one. If that bottleneck disappeared tomorrow, what would still be hard?
You can do it on Monday without us. Take the largest unplanned spend of the last two quarters, a hire, say, or a new tool, and write next to it what it was meant to fix. Then ask that question about it, and write down the answer. Ask it again of the answer. You can stop when the answer is a decision that a named person or a named meeting makes again and again, because that is the address. Then take the same question to the person closest to the work the money was spent on. Their answer will probably not match yours, and the difference is usually the most useful thing on the page.
That last step tends to be awkward, since the decision usually has an owner with a perfectly good reason for it, and now and then the owner turns out to be you.