During a discussion with a CTO, I asked a simple question: "What is the engineering operating budget?"
The answer I received was, "If you need something, just ask, and I'll let you know if we want to do it." I pressed further, asking about current expenses to identify potential optimizations and understand where our support costs were concentrated. "Our budget is unlimited," he said. "Investors will pay for anything if we ask for it right now."
This wasn't good news. It was a clear illustration of a lack of planning, no vision for growth or longevity, and an implicit allowance for waste. It was a company without a strategy.
The Danger of an "Unlimited" Budget
An unlimited budget feels like a luxury, but in reality, it's a curse. Constraints breed creativity and force prioritization. When you have to make hard choices about where to allocate resources, you are forced to think strategically about what is truly important.
An organization with no budgetary constraints has no incentive to be efficient. It can afford to ignore technical debt, overspend on inefficient services, and hire without a clear plan. It's a ship without a rudder, drifting on a sea of investor cash.
Your Budget is Your Identity
In my experience evaluating organizations, I can instantly recognize the level of modernization, the readiness for growth, and the efficiency of an engineering organization simply by looking at its budget allocations and headcount composition. These documents are more revealing than any slide deck or mission statement.
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Headcount Composition: Where are your people? Is the team heavily weighted towards senior engineers building new products, or is it dominated by support staff keeping legacy systems alive? Do you employ a large manual QA team, or have you invested in engineers who build automated testing frameworks? Is your release process managed by a dedicated team, or is it a fully automated part of your development lifecycle? The headcount composition reveals your investment in modern automation over manual legacy processes and tells a clear story about your focus on innovation versus maintenance.
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Infrastructure & Tooling Spend: What are you paying for? Are you investing in modern, scalable cloud infrastructure, developer productivity tools, and robust observability platforms? Or are your costs sunk into maintaining expensive, outdated data centers and proprietary software?
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R&D vs. Keeping the Lights On: What percentage of your total spend is dedicated to research and development for future growth versus simply maintaining the status quo? This is the clearest indicator of your company's ambition.
Your budget is your strategy made manifest. It's the numerical representation of your priorities, your vision, and your identity. Without one, you lack all three.