#81 - Blowing Up the Budget: Why Real Learning Starts With Unlearning

What if the problem isn’t that you're doing things wrong—or even doing the wrong things—but that you’re asking the wrong questions entirely?

Scholars generally distinguish between three forms of learning:

• Single-loop learning asks: Are we doing things right? It focuses on improving existing processes and techniques.

• Double-loop learning asks: Are we doing the right things? It questions the goals behind our actions.

• Triple-loop learning, also known as transformational learning, goes even deeper: How do we know what the right thing to do is? It challenges our underlying assumptions, values, and mental models.

Triple-loop learning often entails a paradigm shift, the creation of new institutions, and the adoption of new objectives and management approaches [1]. It is a cornerstone of resilient thinking, enabling organizations to adapt to shifts in the competitive landscape and respond more quickly to emerging demands and disruptions

Letting Go: A Smarter Way to Stay in Control

Let’s take financial management as a personal example.

In the late 1990s, I became deeply enthusiastic about Quicken, the market-leading personal finance software at the time. I spent hours inputting transactions, setting up budgets, analyzing my spending. It felt efficient. Smart. In control. Compared to my old spreadsheets, it was faster, more precise, and more satisfying. I was becoming very good at doing things right—this was classic single-loop learning. I also believed I was doing the right thing—carefully managing my finances, making responsible decisions. That was double-loop learning.

Then, a casual conversation with a friend shook my confidence. He asked, “Why are you doing all that?” His approach was radically simpler: “I spend what I need, and when the ATM stops giving me money, I know I’m done. Why would I spent time on planning every little thing if I have so many really important priorities to attend to?" No credit cards, no overdrafts—just a simple system that worked for him.

We were both young, living from paycheck to paycheck. Underspending wasn’t really an option. But while I was investing hours in optimizing my budgeting process, he had implemented a minimalist method that freed up his time and mental energy. And the surprising part? It worked. He stayed on top of his finances and eventually became a successful entrepreneur.

That moment forced me to ask a deeper question: Was my entire philosophy about financial planning even valid? This was a classic case of triple-loop learning—questioning the fundamental assumptions I had taken for granted. The lesson stayed with me: true transformation starts not with new tools or better habits, but with challenging the very beliefs that shape them.

When Organizations Budget Themselves into a Corner

A similar tension plays out in many organizations when it comes to financial planning and budgeting.

Some companies invest enormous amounts of time and energy into detailed annual budgets. The process involves long preparations, rounds of discussions, multiple iterations, and formal approvals reaching all the way to the board. It reflects the belief that rigorous planning creates discipline, sets a cultural tone of care, and reinforces the idea that every unit of spend matters. This is a “Quicken” mindset at an organizational level—focused, detailed, and diligent.

Other companies take a different route. They skip traditional budgeting altogether, replacing it with high-level financial forecasts, a limited set of strategic KPIs, and streamlined spend controls. The underlying belief here is that administrative overhead should be minimized, allowing managers to focus on strategic priorities where they truly add value. This model requires a shift in mindset—trusting teams, accepting more uncertainty, and focusing on agility rather than control.

I’ve worked in both environments. Each has its merits—and its traps. The transition between them is never easy. It’s not just a change in tools or workflows; it’s a cultural shift that demands time, patience, and above all, willingness to unlearn.

Even though today’s fast-moving business environment calls for more adaptive and strategic approaches, traditional budgeting still thrives. Many companies continue to believe it’s “the right thing to do.” But the real question is: How do we know it’s still the right thing? That’s the essence of triple-loop learning.

The Hidden Cost of Doing Things “Right”

Triple-loop learning is not about optimization. It’s not even about innovation in the usual sense. It’s about transformation—the courage to challenge what we’ve always believed to be true. Whether in personal finance, corporate budgeting, or leadership models, this level of learning is where the real breakthroughs happen.

So let me leave you with a question: When was the last time you questioned the very premise of how you do things—not just whether you’re doing them well, or whether they make sense—but whether your assumptions still hold in today’s world?

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References and Notes

1. Pingault N and Martius C. 2024. Resilience thinking: A review of key concepts. Occasional Paper 16. Bogor, Indonesia: CIFOR; Nairobi, Kenya: ICRAF.

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