To set effective goals, business leaders must have a handle on their Traditional business resources. Business resources include human, financial, and physical resources. A resource can be identified as anything required to achieve a business goal. Understanding how you utilize these resources directly affects organizational performance, production, engagement, and profitability.
There are parts of science and art involved in managing organizational resources. For most, there are no unlimited resources in the equation. Therefore, how and when to implement and utilize which of our resources matters for sustainability.
To under or over-apply resources at situations, processes, or strategies are art and science. Both have positive or negative consequences organizationally and affect the team, customer, and company. Get it right; we all win. Get it wrong, and the results could be grave.
Understanding Available Resources
Let's begin fully understanding these three fundamental resources at our leadership disposal—a thought to consider: considering how valuable a resource is, identify how you use it. Efficiently used resources are identified as more valuable. Sound resource management demands leaders find more innovative methods to utilize the resources they control effectively.
Human Resource
Human resources refers to the people who work in the organization. Most organizations require people to produce products or implement services they sell to end users and customers. This resource includes all aspects of human relationships and responsibilities within the organization: ownership, executives, managers, supervisors, ground forces, and frontline workers. The people resource makes things happen.
Financial Resource
Financial resources are the resources that provide funding for the organization. Financials for organizations vary depending upon the corporate filing and structure of the organization. Funding via equity, debt, lines of credit, or cash, are all options under your control.
Often referred to as the most crucial resource due to the fact funding is required to make payroll, meet obligations, and pay taxes.
Physical Resource
Just as it sounds, physical resources are tangible resources such as land, equipment, machinery, raw materials, computer hardware, and buildings under the control of an organization. Without these tangibles, it is difficult for any organization to produce and deliver a product or service. The physical resource is critical for success in making things possible.
Management is a Balancing Act
Managing these essential resources as a business owner, executive, and manager can sometimes be challenging. It's a balancing act indeed. Business resources are valuable assets for any organization. Organizations must strategically manage all resources to maximize potential and maximize opportunity. Often, leaders must make difficult decisions when deploying, which can resources. Priorities must be established and executed with discipline.
"Organizations must strategically manage all resources to maximize potential and maximize opportunity."
Jeff Rogers, CPMBC
When trying to keep everyone happy, weak leaders keep no one happy. Strong leaders utilize resources to maximize profitability and mitigate risk to make the most of their potential.
Risk = Probability of Failure X Magnitude of Loss
The balance between making things possible and making things happen is equal parts art and science. Providing resources necessary for success is a primary deliverable for leaders. Deployment of this deliverable is where things can get tricky.
Utilizing the above Risk equation is helpful in this quest for leaders. One can apply this equation to almost any situation or problem and arrive at a better outcome with more confidence and clarity. The equation additionally supports priority development and deployment of valuable resources. This strategy supports engagement, productivity, and profitability. Your resource management is essential for personal, professional, and organizational success.
Leveraging Your Assets
To set effective goals, business leaders must have a handle on their Traditional business resources. Bringing this all together requires a strong leader to understand that to succeed in rapidly changing times, one must fully comprehend all available resources and know where and when to apply them.
The pivot is critical in the execution of resource management. Above all, a strong leader must know how to engage in what involves making things possible combined with the art of making things happen. This is leveraging your assets. The financial resource is fuel to the fire. Without the fuel, it does not matter what is possible or how to make it happen. This diagram illustrates the organizational needs, and they change readily. You know what to do, get on it, and manage your resources properly, like the assets they truly are.
