Everyone is baffled by toilet paper hoarding, and no one is surprised we are all drinking more. In our house, toilet paper back-stock has remained constant (but minimal) before and through the pandemic. Our tequila assortment, however, has never been greater. Clearly we’ve allocated resources by prioritizing entertainment over essentials.
It’s the same in business. In your business, especially during a downtime, resource review and re-allocation is critical. But, like a plan to exercise daily, this analysis can easily get pushed off your priority list by any number of issues that seem more urgent.
When you’re allocating money, time, and management attention, think about where they will deliver the most value to your company. According to McKinsey research, 83% of senior executives identify resource allocation as the top management lever for spurring growth—more important than operational excellence or M&A.
So where do you start? It’s like a good margarita — start with the Tequila.
And that means start with your customer.
Your customer will always serve as the best filter for decision making. What to invest in and what to spend time on should be devoted to improving the customer experience. If your customer is happy, your business will undoubtedly be better. And everyone within your organization needs to believe it.
The ultimate success of any business pursuit is contingent upon internal alignment. Your team, big or small, needs to completely understand the mission and vision of the company, the intended outcome of a particular investment, and their role. They need to drink the Koolaid. They need to be ambassadors.
Your available tools are as critical to your business as they are in making your favorite margarita.
The most valuable part of your company is people — the human capital — and any plans to move your business forward have to start with them. With so much change and churn in the world, people are the only real differentiators in any business. They possess a skill set, knowledge, expertise, and experience that can't be easily replaced. When you recognize individual performance and foster a culture of innovation and contribution, you can maximize this resource and realize your goals.
At some point, you’ve got to spend money to make money. Whether you’re investing in technology, tasks, products, or people, spending money is smart as long as you have a clear set of priorities and a detailed roadmap.
Time is your greatest personal asset, but it's what you chose to do with it that will define what you achieve. You have to plan how you spend your time, ensuring that it is on the things that will improve your business, both in the short term and long term. You can never get time back so make sure to spend it wisely.
Ok, now that you’ve committed to the challenge of resource allocation and review, here are some pro tips to guide you through the process.
5 Important Guidelines for Resource Allocation and Review
1. What are we drinking tonight?
Think about what will create the most value for your company vs. the resources required to get it done.
2. Follow the cocktail recipe — data matters.
Any resource-allocation exercise must be grounded in hard data so that decisions are driven by facts and logic and not personal biases.
3. A shot, not a double — think micro not macro.
You need to drill down to the smallest meaningful items, where a shift in resources will produce a material impact for the overall company. The devil is in the details.
4. You don’t always need a mixer.
Once identified, don’t dilute the highest value items. Force the prioritization of opportunities based on their value creation and stick with them, up and down your organization.
5. Another round — you can't just stop at one.
In this volatile business environment, resource allocation should be reviewed regularly and adjusted accordingly. Agree to a minimum amount to be reviewed and reallocated annually but be careful of knee-jerking and causing unnecessary disruption.
5 Issues that Can Disrupt Your Plan
The biggest proactive move you can make in your business is to know your blind spots. Successfully navigating your land mines requires you to be aware, nimble, and agile.
The 5 biggest potential disruptions that could affect your resource allocation (aside from a pandemic) are:
Keep an eye out for these challenges, make sure plans are in place to accommodate them, and remain agile in your business strategy.
Some Final Thoughts
Because of the pandemic, your greatest asset — time — is also your cheapest commodity. As business owners, we should be using this extra time wisely and effectively, and doing the things we always said we’d do, “if we had the time.”
Resource allocation and review is one of those critically wise exercises.
And to come back to our house’s Tequila-over-toilet paper choice, we’ve always had a huge back stock in paper towels for when things get real. I mean, we’re not unhygienic barbarians — we just want a good margarita.
If you want help crafting your unique cocktail of resources, reach out today.