Monday, April 30, 2012

Fixing the disconnect

New research shows that companies that continually evaluate where its resources (capital, talent and other resources) need to go, aligns resource spend with strategy and adapts spend to market opportunities will be 40 per cent ahead of the company with a fixed allocations strategy over 15 years. 
How to Put Your Money Where Your Strategy Is is a great new piece from McKinsey Quarterly by Steven Hall, Dan Lovallo and Reiner Musters. In essence is examines the dangers of not aligning strategy to resources spend. The distribution of resources needs to be extremely tightly aligned to strategy rather than tightly fixed and inflexible. This is something that really comes out in the audits I do, vast sums wasted on irrelevant communications, leaving no resources for more urgent projects. The McK research proves that this is a very expensive, unproductive way to work.

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