Trade Offs...Competing Priorities

A corporate strategy is what you are going to do…as well as what you are not going to do. Resources are scarce, and a leader must make decisions on trade-offs between competing priorities.

In order to do this effectively, a leader must evaluate business unit performance in a systematic manner. Afterwards, one must adjust resource allocations (capital and talent) based on the market opportunities relative to each division in order to realize strategic goals (similar to rebalancing a stock portfolio). This is easier said than done, because most business leaders are “playing for their own department” instead of the corporation as a whole.

A company is not Robin Hood / wealth redistribution – instead, business is like gambling…you are betting on the winning strategy in order to maximize your return. Each business unit must justify growing/retaining/maintaining their allocations (again, capital and talent).

Otherwise, it is up to the leader to rebalance.

Where are you “doubling down” on your resource allocations?

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