Short version: Some executives are paralyzed—waiting for clarity, sending a fourth email to an unmanned government account, lamenting the gridlock, waiting for the payment to arrive. These are not the actions of leaders; they’re reflexes from last year’s playbook. In uncertain times, leadership isn’t about waiting—it’s about acting on imperfect information.

“We can’t wait for clarity. We have to build for ambiguity.”

We’ve Been Here Before

Executives who came of age in an era of low interest rates and easy capital often see today’s fog as unprecedented. It’s not.

• 1960s–early ’70s: Vietnam, urban unrest, political polarization, and the 1973 oil shock. Procurement and priorities shifted mid-stream; programs stretched while inflation crushed planning assumptions.
• Late ’70s–early ’80s: Double-digit inflation, energy crises, and rate hikes that reordered entire balance sheets. The DoD pipeline saw fits and starts, then a reset. My student loans in that period carried a 7.5% interest rate—and that was considered low.
• Post–Cold War 1990s: Peace dividend whiplash—consolidations, BRAC rounds, and shifting missions.
• 2000’s: The internet was changing the world before our eyes. Remember Friedman’s “The World is Flat,” an international bestseller? That was 2005.
• 2008–2013: The Great Recession hit industry first; defense felt it later. Then came sequestration, automatic caps that hampered budgets for years.
• 2020–2022: COVID fractured supply chains and reshaped workforce and capital expectations.

Throughline: Every period felt “new” to those living it. Each had policy drift, funding lags, and mismatched signals. The winners adjusted faster than their peers.

Today’s Twist: Gridlock + Algorithmic Noise

Yes, Washington is jammed—and likely to remain so even with turnover in elected officials. Add to that a degraded information environment, where narratives are optimized for engagement rather than fidelity. The result isn’t merely “uncertainty”; it’s compounded uncertainty: policy ambiguity + time slippage + unreliable context.

Executive takeaway: Stop waiting for perfect information.

Design operating plans that presume noise and delay.

The Illusion of Free Money

For nearly two decades, capital was cheap. Interest rates were artificially low, liquidity abundant, and leverage easy to justify. The generation of executives who launched companies in that period grew up believing money was near-free fuel for innovation.

But that era was an anomaly. When interest rates spiked in 2022, it redefined what “risk” meant—businesses recalibrated, debt was expensive, and planning was deliberate. Contrast that with the 0–2% decade, where even unproven startups could raise rounds at frothy valuations, mistaking investor enthusiasm for inevitability. Thank you, Shark Tank.

When capital feels free, discipline becomes optional —

and that’s when trouble begins.

Some founders still treat venture capital as free money, forgetting that outside investment dilutes control and caps the founder’s eventual return. Many exit with a fraction of the wealth created by the company they built. For small federal contractors or tech firms eyeing the defense market, that same mindset can appear as over-reliance on a single customer or funding line—short-term comfort masking long-term fragility.

Cheap money hides bad habits. Today’s higher-rate environment isn’t a punishment; it’s a return to normal physics.

Why One Plan Isn’t A Plan

Small companies often operate on a single assumption set: one product, one customer, one funding stream. That may feel efficient—but it’s fragile. Perhaps it’s all you feel you can handle. But planning doesn’t have to cost more.

In today’s environment, a single operating plan is a hope, not a strategy. Government buyers can pause, stretch, or cancel obligations with no warning. A Continuing Resolution (CR) can stall awards; a rescission or reprogramming can quietly redirect funds. An Executive Order can change your market overnight. Even in normal years, the timing of appropriations is a moving target.

A recent reality check: The FY25 CR wasn’t a year-long CR…until it was. We had never seen one; now we may see two back-to-back.

Multiple plans can help you and your team uncover new funding tributaries and flows.

• Plan A: Full funding—assume the budget executes. Note, all 12 appropriations last passed on time in 1996. Plan A has some flaws.
• Plan B: 90-day CR—defer new hires, stage material buys, limit travel, preserve BD tempo. This seems to be a likely scenario right now.
• Plan C: 180-day+ CR or partial shutdown with minibuses and exceptions—protect core capability, pre-draft modification requests, tap bridge financing. Highly likely scenario.

Each plan should include stop-loss calculations and pre-approved moves—decide in advance what gets paused, who gets redeployed, and which contracts or partners you accelerate.

Executives who prepare multiple operating plans are not pessimists—they’re realists. Paralysis is the greater risk. The suggestions above are just to get you thinking about it. We are now living with government by exception.

Diversifying Funding Streams: What It Actually Means

Many leaders talk about “getting into a second program,” but few understand how budget diversification works. Every defense or federal program is mapped to an account, a program, or a service. Program Element (PE) and an appropriation type—RDT&E, Procurement, O&M, etc. 

• Identify adjacency: If you’re tied to an RDT&E line, find its follow-on procurement line or a sister-service equivalent. Many companies succeed moving horizontally, but it requires devotion of energy to new relationships you may not have today.
• Track multi-service relevance: Could your product address both Navy and Coast Guard missions? Those budgets move on completely different legislative timetables, not just different funding lines.
• Use non-DoD funding bridges: SBIRs, DHS S&T, or NOAA innovation grants can fund demonstration work that keeps your pipeline alive during CRs.
• Understand continuing-resolution logic: DoD accounts funded through “minibuses” or already enacted appropriations stay open—did you notice in the last shutdown DoD pay continued while the Coast Guard pay did not?

Capital Under Stress: What “Non-Dilutive” Means

When you hear “non-dilutive capital,” think cash that doesn’t cost ownership.

• Grants (SBIR/STTR): Federal funding for R&D where you retain your IP and equity.
• Contracts / OTAs: Paid deliverables that generate both revenue and credibility.
• Loans / Guarantees: SBA 7(a), 504, or SBIC funds backed by government guarantees—not free money, but not equity dilution either.

What’s Evolving

• Multipolar geopolitics: The U.S. remains central, but Europe is shouldering more, and Gulf states are increasingly pragmatic partners and financiers.
• Procurement pathways: OTAs, DIU-style on-ramps, and rapid-prototyping offices shorten the distance between “need” and “fielded.”
• Industrial policy is back: Critical minerals, microelectronics, shipping, ship repair, and energy storage—policy is again shaping markets.

Government by Exception and the Case of Rare Earths

We are likely to see government by exception for some time—operating not by long-term budgets or coherent strategy, but through continuing resolutions, reprogramming actions, and emergency authorities. This mode of governance rewards improvisation and punishes those waiting for normalcy to return.

Nowhere is this clearer than in the debate over rare earth minerals—an issue that has simmered in legislative language for years but only recently burst into the open. For a decade, “supply chain resilience” appeared in hearing testimony and budget markups as a conceptual goal. Too few truly believed access to these materials would become a strategic fault line.

• Dependency meets leverage: U.S. and allied defense programs—from electric drives and actuators to permanent magnets—depend on materials processed abroad.
• Policy lag: The U.S. has funded pilot-scale extraction and magnet production, but incentives are inconsistent and fragmented across agencies.
• Legislative fatigue: Congress has written about rare earths for years—usually in the “findings” section of authorization bills, rarely in the appropriations language that compels action, and rarely with comprehensive inputs.

As a result, we now legislate by exception: tariffs, export controls, and emergency authorizations—each a temporary patch for a systemic issue. For executives, the lesson is clear: assume fragility, not stability. If your inputs or customers trace to constrained materials, treat that risk like you would a CR—model it, price it, and have an alternate plan ready.

Close: Plan for the Weather You Have

The so-called “free money” era is over—and that’s a good thing. Higher interest rates and budget friction reintroduce discipline, prioritization, and true strategic planning. Uncertainty isn’t going away; it’s compounding. The skill is not predicting the future—it’s pricing uncertainty into your plan and moving anyway.

In government markets, clarity is earned. Momentum is funded.

What Am I Reading?

Strong Ground, by Brené Brown. Readable, timely, and deeply researched, Strong Ground challenges leaders to invest continuously in their own growth. Brown redefines the roles of manager and leader in an age of AI and rapid change, showing how clarity, curiosity, and empathy create fulfillment and resilience in modern organizations.