Tuesday, September 18, 2012

Limited Resources

Relative Perception influences the downward spike of the Change Curve but an even more profound influence is the natural limitation on resources.  Large changes have put many companies out of business.  The depth and width of the downward spike becomes too big to overcome.

A not infrequent example is that of a small company in a relatively fast growing market that wants to significantly increase sales results.  A new sales manager is hired (or worse, their top salesperson is promoted) and given the objective of doubling new account acquisition.  The plan seems simple enough.  To double sales, double the sales staff.

Only the objective is never realized.  In fact, if you double your sales force quickly, sales typically fall through the basement.  Why?  It takes time for new additions to become productive.  So while new salespeople aren’t yet productive, the original salespeople are spending much of their time mentoring, training, and answering the questions of the new people.  Never forget Parkinson’s Law: work creates work.  Deploying new resources is work.  Like it or not, the introduction of new capacity actually decreases productivity until those new resources are deployed and fully productive.  Do it too fast and you can put an organization out of business.
For an enterprise purposefully pursuing long term success, there is no such thing as unlimited resources.  It makes no difference if you could actually double the sales force, triple it or quadruple it because you have the funds.  It makes no difference if un-deployed labor, capital, or material is available.  Deployment, not availability, is the issue.  Resources have to be deployed to become productive and deploying them consumes existing resources and energy.  The concept of limited resources due to deployment is like an hourglass.  You may have access to labor in the case of the sales staff example, but the only way you can successfully deploy those additional resources is incrementally.  You have to get them through the neck of the hourglass, if you are to deploy them without a large negative impact on performance. 

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