This is a critical leadership role – choosing where to allocate resources and where not to. It must be guided by your strategy – which contains all your key choices (read “Playing to Win” by A.G. Lafley):
- What are you trying to achieve in the business – your winning aspiration?
- Where do you play?
- How do you win?
- What are your core capabilities?
- What management systems are required?
Every day leaders must make decisions about how to fund or resource competing and dissimilar initiatives. For most managers, allocating resources is fairly easy. After all, they have a fairly narrow set of objectives to achieve, and they choose based on what will deliver the best financial results. However for a CEO or business owner it can be far more difficult as s/he juggles more complicated financial goals. Does one go for revenue or profitability? One tactic is to ask those requesting such resources what they would take out of their budgets in order to fund the initiative in the event that additional funding were not available. The response is telling – especially if they decide they wouldn’t take anything out because this new initiative is a lower priority than what is in the budget.
Allocating people can be even more difficult. Business success depends on being able to attract and retain the right talent – as well as utilising this talent in the best possible way. This allocation of people needs to work for both the organisation and the individual. This can be tricky. If an employee’s interests lie in one direction, while the organisation needs that person focused elsewhere it can create tension that could result in the employee becoming disaffected. This is a tricky juggling act, and needs to be handled sensitively. Could you free this person up to work in their area of interest on a project basis rather than permanently - if moving them permanently creates additional problems for the business?
To what do you refer when you need to make decisions about allocating funding to initiatives that have not been included in the budget? What tactics help you make an intelligent choice? Do you have a talented employee filling an essential role – but this employee is desperate to do something different? How could you manage this in such a way that you act in the best interests.
Watch this space for the new series, starting in January 2016, and please feel free to contact me any time with queries, suggestions or comments.