Jason M. Lemkin explains how Adobe and other big companies split money into three buckets: budgeted (multi-year contracts), slush ($500K-$1M per senior leader, use-it-or-lose-it), and unbudgeted. The slush fund solves a leader's top three problems fast, without waiting for CFO approval.
Chapters
But even I had a $500K slush budget. What you don't realize, I'll tell you how it works in big companies. Maybe you folks have worked in there. I was just a VP at Adobe for a little more than a year. But basically there was unbudgeted, discretionary, and budgeted, right? You sort of know these words, but you might not see them in practice, okay? Getting budgeted money, it was big dollars, but it was really hard, okay? They were multi-million dollar contracts. These often would take 1, 3, 5 years of discussing and planning until you could close that deal. But then I was the most junior VP of all the VPs, but even I had a $500K slush budget. Okay, this was a while ago, so it might be a million bucks. Okay. And everyone had more. And what was my slush budget for? My top 3 needs that I just couldn't get elsewhere in the organization or elsewhere budgeted through the CFO. And I needed— so if you gave me— if you solve one of my 3 needs sitting in my corner tower office, And it was some fraction of that $500K to $1 million. I had budget. I didn't even care. It's use it or lose it in big companies. Okay. Now, I didn't have one more dollar than that. I didn't have one more dollar and I didn't care about my eighth problem. But selfishly, if you solved one of my problems, I had $500K to $1 million to buy. So those are the budgets you're fighting for. They haven't changed in the age of AI, but our priorities have changed. And, you know, so many folks have their, their own problems in their own org. But they're also under pressure to bring innovation into the enterprise. But I had— it was really, really hard for me to get a million-dollar piece of software in. It probably would have taken me years as the new VP. But I had a million bucks in aggregate, almost a million bucks to spend on whatever I needed to get the hundreds of folks that work for me just to solve their problems. But I could do that in a week or two.
