Why Organisations Fund Last Year’s Priorities With This Year’s Reality

There’s a quiet contradiction playing out inside almost every large organisation right now.

A tension between what leaders know they should do…and what the system quietly pushes them to do.

Our audience ofter mentions how quickly...

“Markets have shifted.” “Customer behaviour has changed.” And how they “need to move faster this year.”

And yet

Budgets, priorities, and resource allocation still look remarkably similar to last year.

The same initiatives. The same funding ratios. The same programs carried forward. The same bets re-endorsed with new slides.

It’s the hidden force of enterprise momentum.

The tendency to fund last year’s strategy with this year’s reality.

And it’s one of the most expensive execution gaps in modern organisations.

Let’s break down why it happens, and what the best strategy leaders are doing differently.

1. The illusion of continuity: why momentum feels safer than reality

In theory, strategy is about choosing. In practice, strategy often becomes about continuing.

Not because leaders lack discipline. But because the organisation is wired for stability.

Three forces drive this:

Sunk-cost bias

A well-documented behavioural pattern: Once time, money, or reputation has been invested, humans, especially senior leaders, struggle to walk away.

The logic becomes: “We’ve already spent 12 months on this; we can’t stop now.”

But sunk cost is not strategy. It’s psychology.

Decision inertia

Recent research from McKinsey and Gartner shows the same thing:

Organisations underestimate the cost of slow decisions more than they underestimate the cost of wrong ones.

Pausing or killing a program triggers:

• political tension

• stakeholder questions

• re-planning

• re-forecasting

• uncomfortable conversations
  

Continuing avoids all of this.

Momentum becomes the path of least resistance.

Risk misperception

Leaders often perceive changing direction as the risk. But in fast-moving markets, the real risk is not changing.

Yet the enterprise machine rewards consistency more than responsiveness.

So last year’s priorities quietly roll forward, even if the world has moved on.

2. The budgeting system locks in old strategy, even when new signals appear

Even the most forward-thinking organisations rely on two mechanisms that slow adaptation:

Annual budgeting

The calendar, not the market, drives decisions.

Budgets approved in November reflect the conditions of August. By February, those assumptions are outdated. But the cost structure is locked.

Leaders spend the year defending a plan shaped by a different reality.

Portfolio inertia

Once an initiative becomes “part of the portfolio,” it takes on a life of its own.

It gets:

• monthly reporting

• steering committees

• status rituals

• governance artefacts
  

These structures create organisational gravity.

Stopping an initiative often requires more political capital than starting one.

This is how yesterday’s bets survive today’s truth.

3. The real constraint: organisations aren’t instrumented to detect when a priority has expired

Across dozens of conversations with CSOs and transformation leaders, the same pattern appears:

Most organisations can measure performance. Very few can measure relevance.

They ask: “Is the project on track?”

They rarely ask: “Is the project still worth doing?”

That second question requires:

• real-time market visibility

• friction-level customer data

• leading indicators of impact

• mechanisms to test underlying assumptions

• a process for stopping work, not just starting it
  

Without these signals, organisations default to the safest option: Keep going.

4. The organisations getting this right do three things differently

The leaders we’re seeing pull ahead are not more disciplined. They’re more designed for adaptation.

Three practices stand out.

1. They separate strategy from allocation

Most organisations treat strategy as a planning exercise.

The best ones treat allocation as the real strategy.

They revisit funding not annually, but continuously,shifting 2–5% of capital each month based on evidence, not presentations.

Money moves where momentum is real, not historical.

2. They predefine kill/pivot rules before work begins

This reduces sunk-cost bias by removing emotion.

Kill rules look like:

• “If adoption is less then 20% by Day 60 then stop”

• “If no leading indicator movement then re-evaluate scope”
  

Teams know from Day 1 how decisions will be made.

No politics. No surprises. No momentum for momentum’s sake.

3. They track “strategic decay” as a metric

The smartest organisations measure how quickly a priority loses relevance.

They look at:

• signal shifts

• competitor moves

• customer behaviour changes

• economic deltas

• technology jumps
  

One APAC bank uses a “priority half-life”: Every 90 days, each strategic bet must re-justify its relevance.

It’s a forcing mechanism that catches outdated priorities early.

5. Three questions strategy leaders should sit with this week

If you want to see where momentum is silently driving your organisation, ask:

What percentage of this year’s budget is based on last year’s assumptions?

Most leaders are surprised by the answer.

Which initiatives survived because they’re valuable…and which survived because they’re familiar?

Familiarity feels like certainty.It isn’t. What mechanisms do we have to stop work, not just start it?

Execution speed is not about doing more.It’s about deciding faster.

Where this is heading

We’re entering a world where markets move faster than planning cycles, and capital needs to move at the speed of evidence, not the speed of calendar governance.

The organisations that win won’t be the ones with the most ambitious strategies.

They’ll be the ones that can:

• detect when reality shifts

• challenge their own momentum

• stop misaligned work quickly

• reallocate capital without friction

• and make decisions based on signals, not sunk cost
  

Because in a world defined by volatility, the greatest drag on strategy isn’t competition. It’s last year’s priorities quietly shaping this year’s decisions.