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In the business world, managers spend a lot of time juggling resource allocation. Every company has a finite amount of resources — whether it be financial capital or human capital — to use and spend in order to achieve the company’s strategic goals. Effective allocation generates growth and success, while ineffective allocation results in loss and failure.
Stock market analysts often look to a company’s resource allocation to determine the health and direction of that business. It’s usually a better indicator than listening to what the company says are their long-term goals. Businessman Andy Grove put it this way: “To understand a company’s strategy, look at what they actually do rather than what they say they will do.”
How to Allocate Your Resources?
In his book How Will You Measure Your Life?, Harvard business professor Clay Christensen argues that individuals face the same challenges as businesses when it comes to wisely allocating resources. For us, our most precious resources are typically time and money. Each of us has several competing “departments” in our life (family, work, school, church, friends, etc.) vying for a slice of this limited pie.
Moreover, Christensen posits that a good way to evaluate what’s really important in our lives is to simply look at how we allocate our resources — just like a stock investor might look at a company’s financial data to determine whether it’s on sure footing. Follow the time and money trail and you’ll find what a man truly values, rather than simply what he says he values.
Imagine that an independent analyst opened the ledger book of your life and looked over reports detailing the way you spend your time and money. You tell the analyst that what you value most is your education, fitness, and spending time with your girlfriend. But what the analyst sees in your ledger book is this:
Time Spent in Given Week:
§ Surfing the internet: 22 hours
§ Work: 20 hours
§ Playing video games: 8 hours
§ Hanging out with your friends: 7 hours
§ Spending time with girlfriend: 6 hours
§ Studying for class: 3 hours
§ Working out: 3 hours
§ Reading for pleasure: 0 hours
What conclusion would an analyst draw about your core values or where you’re going with your life from this report? Would it show a man who makes his girlfriend, fitness, and education his top priorities? Or would it reveal a man who values video games, Doritos Locos, and Reddit memes the most?
I know it might seem a little clinical to look at every aspect of your life, even your personal relationships, in a purely data-driven, budgetary light. But I think examining your own methods of “resource allocation” is a useful way to measure whether you’re actually walking the walk when it comes to your core values or accomplishing your goals. It keeps you honest about the man you say you want to be, and the man you are. And it’s particularly useful in gauging your progress on goals that don’t offer immediate or concrete feedback, such as improving your relationship with your spouse or becoming a better leader.
Become the Boss of Your Life: How to Effectively Manage Your Personal Resources
So how do you start allocating your precious, limited resources to the departments in your life you most want to support and build? The following steps will put you in the corner office of life.
Step 1: Conduct an Audit of How You’re Currently Spending Your Resources