Resource Allocation Discipline
In the dynamic landscape of business, the degree of discipline with which an organisation allocates (and deploys) it resources, is the most underrated and inexpensive insurance policy. At its best, disciplined resource allocation (and actual deployment) is the weaving together of priorities, capabilities, and aspiration. And this thinking needs to begin at the beginning of a corporate strategy journey in order to ensure that neither "glamour" initiatives or "pet projects" receive a disproportionate amount of resources.
The pools of resources to consider are as follows.
❶ Core - These are businesses that form the organisation's core, and it is critical to ring fence resources to ensure that all associated activities continue to be optimised and leveraged to secure bread-and butter revenue. Thus ensuring short-term profitability and stability.
❷ Maintenance - Often the most overlooked bucket of resource allocation because maintenance work is, frankly, boring and invisible. The best thing that can happen is that nothing (bad) happens. But neglecting this aspect is bulletproof recipe for disaster at some (indefinite) point in the future. Examples of organisations that paid dearly for maintenance neglect include BP's Deepwater Horizon oil spill (2010), Boeing's 737 Max crashes (2018/2019), and Libya's flood disaster (2023).
❸ New - On the foundation of the above 2, all organisations need to commit a percentage of their resources to explore new markets, products/services, business models etc. Truism though it may be, if you don't do it, your competition will.
❹ Moonshot - Depending on your appetite, this is the bucket exploring high-risk (high-reward) experiments that have the potential to rewrite the rules of the game, and even redefine the industry. An example being when Astrazeneca created Marlow Foods in 1985 to commercialise plant-based protein under the Quorn brand. Quorn redefined the idea of what plant-based protein is by expanding the consumer's imagination beyond soya.
❺ Reserve - Essentially liquid assets/cash that enable you to either move fast when opportunity strikes and/or response to unforeseen challenges without diverting resources from other buckets (i.e., mitigate against the risk of black-swan events sinking the organisation).
What to read next? Try Strategic Brilliance: The Profit Revolution Beyond Growth.
To find out how I can help you and your organisation co-create a Me-Only corporate strategy, click on the button below to connect with me.
The pools of resources to consider are as follows.
❶ Core - These are businesses that form the organisation's core, and it is critical to ring fence resources to ensure that all associated activities continue to be optimised and leveraged to secure bread-and butter revenue. Thus ensuring short-term profitability and stability.
❷ Maintenance - Often the most overlooked bucket of resource allocation because maintenance work is, frankly, boring and invisible. The best thing that can happen is that nothing (bad) happens. But neglecting this aspect is bulletproof recipe for disaster at some (indefinite) point in the future. Examples of organisations that paid dearly for maintenance neglect include BP's Deepwater Horizon oil spill (2010), Boeing's 737 Max crashes (2018/2019), and Libya's flood disaster (2023).
❸ New - On the foundation of the above 2, all organisations need to commit a percentage of their resources to explore new markets, products/services, business models etc. Truism though it may be, if you don't do it, your competition will.
❹ Moonshot - Depending on your appetite, this is the bucket exploring high-risk (high-reward) experiments that have the potential to rewrite the rules of the game, and even redefine the industry. An example being when Astrazeneca created Marlow Foods in 1985 to commercialise plant-based protein under the Quorn brand. Quorn redefined the idea of what plant-based protein is by expanding the consumer's imagination beyond soya.
❺ Reserve - Essentially liquid assets/cash that enable you to either move fast when opportunity strikes and/or response to unforeseen challenges without diverting resources from other buckets (i.e., mitigate against the risk of black-swan events sinking the organisation).
What to read next? Try Strategic Brilliance: The Profit Revolution Beyond Growth.
To find out how I can help you and your organisation co-create a Me-Only corporate strategy, click on the button below to connect with me.