You Get What You Pay For
An Incisive Inquiry Into the Intestines of Overfunded Projects
Mangelwirtschaft
Yes, there can be too little. As a child of the former GDR, that famously failed experiment on prison yard socialism, I still remember glimpses of an economy where there was always too little of everything worthwhile, and in suboptimal quality at that, available erratically, and obtainable only using “relationships,” a word pregnant with hushed undertones of vital importance and shady conduct, always a telltale sign of a bona fide scarcity economy (“Mangelwirtschaft” in German) where creative low-budget tinkering and makeshift livelihoods are as blatantly mainstream as social media addiction and get-rich-quick schemes are today. While this was the past in most places and most times, it will arguably also be the future we’re likely to get, albeit not the future we ordered.
Nevertheless, at least in the global north, we’re not quite there yet.
Overfunding
One of the worst atrocities in the context of designing and building complex systems is the overfunding of projects. And this is much more dangerous than just a waste of money as you might have experienced yourself when your car repair shop switched parts valued at 50€ in two hours and, shamelessly exploiting your ignorance, charged you 1600€. While this might be unfortunate for your purse, no real harm is being done except to your ego. In contrast, overfunded projects entail a host of problems and conundrums that are toxic to the people involved, the quality of the work, and even the goal of the project itself. Let’s walk through the most prevalent of those issues.
Misallocation of Resources and Wasted Efforts
It’s typical for overfunded projects that massive resources and efforts go into low-priority tasks; money is sunk into unimportant endeavors just because funds are available. The underlying reason, of course, is the nature of contracting work, where contractors are paid by the person-hour invested, not by the outcome. And even if a fixed price structure is negotiated, initial estimates are still based on countless days and weeks being wasted on mere talk and low-value fringe activities.
Accountability Vacuum
Large funds sprout large teams with multiple redundancies in terms of scope, expertise, and responsibility. For most tasks and decisions, it’s unclear who’s responsible and who should get involved. Aside from meeting bloat and email cascades, this turns the simplest decision-making situations into large-scale battles for influence, especially if a consensus model is enforced.
Ineffective Hangers-on
Overfunded projects draw a certain class of infamous people out of their holes: Employees, freelancers, and entrepreneurs looking for a free ride. You can hide well and earn nicely in overfunded large-scale projects without providing the least bit of value. The skills of pretending to be busy even if daydreaming through social media, arrogantly claiming ownership of somebody else’s ideas, hiding one’s own cluelessness before the causal observer, and grudgingly producing unreadable “deliverables” without intrinsic value are taught in every school today. I’d even go so far as to claim a tight correlation between the percentage of ineffective hangers-on and the percentage of overfunding: 20% freeloaders implies at least 20% overfunding.
Excessive Risk-Taking or Risk-Control
Strangely, overfunding can push risk coping in either of two contrary directions; a good middle way is rarely seen: Either the project team is so well-fed, celebrated, and overinsured that they care precious little for what could go wrong—a nice example is the contemporary breed of overleveraged AI startups—or risk management is itself vastly overfunded so that hundreds or thousands of the most outlandishly esoteric risks are being discovered, recorded, analyzed, and otherwise cared for. This is one of the main reasons why large companies are so agonizingly slow and why overfunded projects deliver so little value compared to the investment.
Complacency and Declining Efficiency
Another reason for the meager returns on investment in overfunded projects is the complacency and ennui bordering on apathy that comes when you’re too well off without having fought for it. You can’t be well-fed and hungry at the same time, and you can’t fight when you’re full. With complacency comes diluted focus, lack of drive, an embarrassing overhead of pointless chattering, a rather loose orientation toward the project goal, and all the rest of the symptoms of a decadent aristocracy. It’s no wonder that overfunded projects rarely provide more than 5% value.
Split-Brain Situations
Several teams working in different directions, workers digging into the same material without knowing each other, activities at odds with each other and the overall plan, teams prioritizing according to their whim—all these are signs of split-brain situations that come along when too many people work on too few construction sites, as is the case in overfunded projects. Surely you can imagine the consequences: Ruptured motivation, downtrodden team spirit, heated arguments, meaningless meetings, and work for the trash can. In short, burned money.
Functionary’s Falsity
The term “functionary’s falsity” is a John Gall invention denoting the uncanny fact that, in large systems and overfunded projects alike, many people don’t do what their title says they do—program leaders don’t lead, project managers don’t manage, architects don’t design, consultants don’t consult, and developers don’t develop, most of the time. Aside from the aforementioned brazen freeloaders, many honest people land in overfunded projects and think to themselves: “What am I doing here? I’m not really needed.” Yet, most stay. It’s their job, after all. After all those years, I find it still amazing how long a senior consultant can be milked as a meeting facilitator and how many managers are not much more than a mix of number reporters and trauma therapists.
Power Struggles
In overfunded projects, there’s cream to skim. With excessive funds comes the power to fund pet projects, side hustles, and proofs-of-concept with interesting transfer potential; there’s also the race to the top and the opportunity to make a real dent in the income curve. This power rarely goes uncontested, so don’t be surprised when the dog fights start.
Public Overscrutiny
Especially in publicly overfunded projects, overscrutiny follows suit. There must be a kind of bad feeling around such projects that induces data protection bodies, data security agencies, and federal audit offices to look closer and deeper than usual. While the motivation might be wholesome, the consequences are much less so, not least because the force of overscrutiny must be met with the equal and opposite force of overexplanation, and guess who gets to do it. No, not management, not the ineffective hangers-on, and not the well-groomed dealmakers. This is one more monster task on the plate of those who are already burdened with the actual work, which is interrupted, questioned, and massively compounded by every assessment and official justification.
Overall Bloat and Scope Creep
We’ve already seen that if funds are available, people are available, and those people must be kept busy. Few corporations can tolerate the naked reality of top-notch knowledge work, which means large portions of self-directed training and excellent self-care interspersed with bursts of high-end performance and ample recovery. So, makework is needed. Luckily, every task has reporting duties associated, and every sub-problem comes with potential alternatives that must be examined, evaluated, and diligently carved into oh-so-important proofs of work. Before long, the project backlog has proliferated to Byzantinian size and complexity, and no one quite knows what’s really important anymore. And then, when yet another milestone can’t be met, management triages all the wrong things and emphasizes superficial toils that look sleek in presentations.
Extravagance and Luxury
It’s fun the first time around to experience hackathons as lush banquets in disguise and travel through the republic for no better reason than drinking coffee with remote colleagues and seeing presentations everyone knows already. But the glitter wears off. Soon, you wonder why there’s so much money left for activities that produce absolutely no value but loads of exhaustion and wasted time. Simply, you’ve found yourself in an overfunded project. The occasional team event might have its value, but when emails could have been chat messages, meetings could have been emails, and conferences could have been brief meetings, things have gone too far. There’s always a good part of management self-justification involved: If all the funds are used up in time, the project couldn’t possibly have been overfunded, right?
Addiction and Obesity
Individuals, teams, and companies alike have the scary inclination to get addicted to overfunded projects. Once you’ve got used to your job as a combination of traveling, partying, and PowerPoint fiddling, all is lost. Likewise, companies with a track record of big game hunting might wallow in their profits while being unable to solve the simplest challenges and straightforward projects. Watch out.
No Can Do
The eeriest property of overfunded projects I’ve saved for last: They often fail to deliver. All the points above conspire to produce an environment where much is done, but little is created. Especially in the software industry, there’s still the prevailing “price indicates quality” fallacy at work—the more expensive something is, the better it must certainly be. But that isn’t so. If you spend too much, you might not get even close to what you want. Sometimes, you get nothing, as in the case of the FBI Virtual Case File. Sometimes, you stand there and think, “damn, I could have had this for one-tenth of the price.” And sometimes, you suddenly find yourself in the illustrious list of organizations damaged or destroyed by sunk investments with few results, if any.
Escape Routes
Since I know that many benefit vastly from overfunded projects, not all will want to hear what I have to say now: Preventing, avoiding, or curtailing overfunded projects is possible, but first, you have to spot overfunding.
How to Spot Overfunding
You must spot overfunding as early as possible, ideally way before the ink is dry. This is easier from the inside since clients and regulators often can’t appreciate the involved complexities and complications in their endtime splendor. Therefore, it pays a thousandfold to insert a seasoned spy, like yours truly, into the project team and have a look from the inside out. Then, the early symptoms of overfunding are easily spotted: An inverted pyramid of too many officers and too few soldiers, lavish parties, excessive meetings of clueless hangers-on, people spending days on what should take hours and weeks on what should take days, a staff made up largely of overpaid broadband non-experts, heavily contested discussions on the simplest decisions, general overstaffing, and the like.
How to Stop Overfunding
Once you spot an overfunded project, your possibilities depend on your role and the concrete circumstances.
- Preventing. As a client or sponsor, you can simply prevent overfunding from happening in the first place and walk over to a smaller, leaner, hungrier contractor. The threat of doing this sometimes is enough to induce a greatly slimmed offer, sometimes cut in half, so that you wonder how they came up with the initial offer. I wonder, too.
- Avoiding. As a project worker, you might want to avoid overfunded projects like the plague. It might be biographically valuable once or twice, but you won’t become your best self by burning other’s money to the tune of mindless charts and slides and mass meetings.
- Curtailing. As a manager, you aren’t immediately rewarded for negotiating what’s seen as a below-average sum for a project contract. Still, in the long term, project success and employee satisfaction weigh much, much more than gross revenue. Determining the minimum funds for realizing a project should be high on your agenda, and if you’re already deep in, muster all your strength to prevent overfunding, even if this means foregoing the call for maximum profits.
Are you up to it?
Lastly, I have to concede that there are rare occasions when overfunding is the correct order of the day: While a slight underfunding produces lean teams, efficient work, and often high fighting spirits, in times of imminent crisis, you want a team so large and with such a powerful momentum that it rolls over any and every obstacle like a bulldozer. This is not nice, it’s grossly wasteful, and it’s certainly not a sustainable long-term business model (except, weirdly, in defense and IT), but it works like a roaring charm. If it works.
