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A Funding plan is a strategic tool that financially drives organizational tactics. Its intent is to inform and drive the organizational fiscal decision-making process for a selected period of time. It functions as a roadmap to inform internal as well as external stakeholders of both financial and tactical intent and results.

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Related Mindset:



Organizational Foundations


Organizational Mission and Vision


Aligned Funding Plan

The Funding Plan is the direct, next step beyond the vision that enables an organization to accomplish the experience that they’ve envisioned with a predictable cadence.

It is elemental in the configuration of structures, processes, people, practices, and reward systems that are necessary to accomplish the strategy.

The Funding plan will also reflect the organization’s penchant for embracing or reducing risk, its desire for agility or stability, and its drive for speed or accuracy. Steeped in a contextual assessment of business threats, opportunities, weaknesses, and strengths, the Funding plan will strategically apportion limited resources to internal groups that compete for these scarce resources; the reward of which must accommodate or anticipate the current and emerging, market-driven pressures.

These Funding strategies will reflect an investment tactic that underscores the planning horizon that the company is comfortable with. Two examples of this are a concaved tactic that steadily but minimally increases the rate of return until the investment peaks, and then reduces the capital, allowing the company to harvest as much as possible. A convexed tactic is one that invests heavily up front with decreasing rates of return; then reinvests until the operation achieves a significant scale. Both financial tactics achieve results that are commensurate with the underlying Values, Mission, and Visional goals that drive the plan.

The central requirements surrounding a Funding plan include:

  • Business assessment – An assessment of the context in which this business operates is essential. This means understanding the external business environment in terms of threats and opportunities, as well as the internal organizational environment in terms of weaknesses and strengths. Central to this assessment are the Mission and Vision statements that aid in ensuring a balanced scorecard approach to financial planning; ensuring an equal voice from satisfaction, innovation, efficiency and financial performance, alike.
  • Capital budget – An analysis of the current operating budget, which includes the financial impacts of all capital (physical) and operating expenses. This includes operating revenue and presents a clear picture of the fiscal state of the organization. This creates the basis for the future-funding map, which is then combined with the anticipated direction that the leadership intends to direct resources.
  • Results tracking – The achievement of financial milestones and goals is critical as a decision-making tool for future effort investment. Having the demonstrated metrics to ensure confidence in future spending in a rapidly shifting economy is a critical requirement. Investors, board members, leadership, and employees alike rely on the metrics as proof statements in the effectiveness of the delivered strategy.

While many will say that the purpose of a business is to turn a profit (which is the central goal of the Funding effort), the actual purpose of a business is to add value. The Funding model is a critical component in this effort to ascribe value.

Project and Product Funding

Successful organizations have shifted from Funding scope-bound project efforts to team-based product efforts. For many organizations this is a fundamental change to how value is delivered and assessed. This requires Finance to take a different approach when adopting lean-agile product based thinking.

When adopting new Funding paradigms, it is essential that Finance is directly involved in training, discussions, and planning. While value can be realized when using waterfall Funding for digital efforts, the full benefit of Value-Driven Agile and Lean Methodologies will not be fully realized.

The Scaled Agile Framework® provides guidance on how to properly handle the categorization of lean agile development:

Common Pitfalls

Funding efforts are the first tangible, actionable, and concrete artifact that most business leaders are comfortable with in developing a business strategy.

They can finally roll up their sleeves and “get down to business”, quickly losing themselves in the endless details of enabling a plan. It’s easy to lose sight of the intent of the organization, allowing that consuming interest to drive outward behaviors. Whether intentional or not, the outcomes can quickly become visibly evident in the organizational experience, which telegraphs directly through to the customer experience.

Warning signs of a runaway Funding interest:

  • Funding plan replaces the customer plan - Assumptions are quickly forged in the Funding scheme and mathematical thinking replaces experience thinking. The belief that (Action A + Action B = Result C) is a dangerous concept in a work of fickle human experiences. Continuous customer research is essential to evaluate the likelihood and effectiveness of programs and spending. It’s easy to begin thinking “What’s good for General Motors is great for America”; thinking that eventually doomed not only an industry but an entire social economy.
  • Funding objectives drive short-term thinking – While many organizations boast marvelous cultures and values, every day we see companies that are fined, individuals that are imprisoned, and doors that are closed, for unethical business practices that achieved financial objectives at any cost. It’s easy to become driven by quarterly earnings; conveniently justifying behaviors necessary to meet expectations in the face of conditions that make it impossible. It’s easier to cheat the system than it is to change it: classic short-term thinking. Ensure that your organization is grounded in its values, practices and demands adherence, and is flexible enough to look at the long-term impact of immediate decisions.
  • Cost becomes greater than value – The business value of a feature or function can quickly get bogged down by the cost required to produce it, and while this makes perfect business sense, be mindful of the fact that the tools used to estimate cost are rarely the same tools that estimate value. Watch for an organization that determines what they’ll do based only on financial projections. Balance this drive with assessments that also include user business value, time criticality, and the opportunity enablement value that may be present.
  • Funding is tied to a project scope – For organizations that have yet to fully align behind delivering value, Funding becomes tied to a project based scope rather than a team within a value stream of the organization. In these cases, organizations need to shift to digital product based approaches which fund teams rather than a project scope.