How can you avoid common resource allocation risks in business strategy?

1 Assess your current situation

Before you allocate your resources, you need to have a clear understanding of your current situation, including your goals, priorities, constraints, and opportunities. You can use tools such as SWOT analysis, portfolio analysis, or balanced scorecard to evaluate your strengths, weaknesses, opportunities, and threats, as well as your strategic objectives and performance indicators. This will help you identify the gaps between your current and desired state, and the most important areas to focus your resources on.

2 Align your resources with your strategy

Once you have defined your goals and priorities, you need to align your resources with your strategy, ensuring that they support your vision, mission, and values. You can use tools such as strategy maps, resource allocation matrices, or value chain analysis to map out how your resources contribute to your strategic outcomes and competitive advantage. This will help you avoid misalignment, which can lead to inefficiency, confusion, and loss of focus.

3 Optimize your resource mix

Another key aspect of resource allocation is optimizing your resource mix, which involves choosing the right combination of resources to achieve your goals. You need to consider the quantity, quality, and type of resources you have, and how they interact with each other. You can use tools such as optimization models, scenario analysis, or sensitivity analysis to test different resource combinations and their impact on your performance and risk. This will help you avoid overcommitment, which can lead to burnout, stress, and missed deadlines.

4 Monitor and adjust your resource allocation

Finally, you need to monitor and adjust your resource allocation as your situation changes, as it is not a one-time decision, but a dynamic and ongoing process. You need to track your resource utilization, availability, and allocation, and compare them with your planned and actual results. You can use tools such as dashboards, reports, or feedback loops to collect and analyze data on your resource allocation and its outcomes. This will help you avoid waste, which can lead to overspending, underutilization, and lost opportunities.

5 Manage your resource conflicts

One of the most common and challenging risks of resource allocation is conflict, which can arise when different stakeholders have competing or incompatible demands or expectations for your resources. You need to manage your resource conflicts effectively, by applying skills such as communication, negotiation, collaboration, and problem-solving. You can use tools such as stakeholder analysis, conflict resolution models, or mediation techniques to identify and address the sources, interests, and impacts of your resource conflicts. This will help you avoid escalation, which can lead to resentment, hostility, and damage to your relationships and reputation.

6 Learn from your resource allocation experience

The last tip to avoid common resource allocation risks is to learn from your resource allocation experience, by reflecting on what worked well and what did not, and applying the lessons learned to improve your future resource allocation decisions. You can use tools such as after-action reviews, lessons learned reports, or best practices databases to capture and share your resource allocation insights and recommendations. This will help you avoid repetition, which can lead to stagnation, complacency, and loss of innovation.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?