Pooling resources
This is the third in a suite of five articles exploring the art of delegating. This one focuses on resources. Delegation is a theoretical concept without any utility until people are empowered with the specific resources required to deliver on expectations. Those resources are likely financial, information, operational or technical, people and time.
Delegation Framework
The art of delegating has four components: direction, resources, bounded authority and accountability.
- DIRECTION/intent – what, why and interdependencies
- RESOURCES (financial, information, operations/technical, people, time) – specific
- AUTHORITY to make tactical decisions within strategic boundaries/guidelines – balanced
- ACCOUNTABILITY and consequences of success and failure – owned
Specific Resources
A little more on financial, information, operations/technical, people and time resources:
- Financial: balance sheet, operating cash to pay to outsource things not available internally
- Information: data, systems, support
- Operations/technical: material, equipment/tools/machines, infrastructure, space, utilities
- People: to help obtain input, to support and help think, to help implement,
- Time: deferral or elimination of other responsibilities
Of these, the financial and time are arguably the most important. With enough financial resources, someone can obtain the information, operational/technical help and people they need if they are not available internally. Freeing up people’s time from other priorities to focus on what you’re delegating is critical. No one can manufacture time.
Scope is a function of resources x time
If it takes three minutes for one person to make a cafe au lait, it will take thirty minutes for them to make ten. If the scope expands to twenty, at a simplistic level, you either need to add a second person to complete the task within thirty minutes, bring in a faster machine or allow more time. (Note this simplistically suggests the existing machine is not a choke point.)
Puritan Foods example
Procter & Gamble (P&G’s) Puritan Cooking Oil was made with canola, making it a healthier choice. The brand manager saw an opportunity to expand into a line of Puritan Foods, all made with Puritan Oil. He thought there was an opportunity to increase revenue and profits, but, even more importantly, strengthen the brand’s position as a healthier food alternative.
He pitched the idea to the division general manager who said, “No. Stay focused on oil.”
The brand manager went away for three weeks and came back with a full set of financials for the project.
The general manager said, “This makes it even more clear that we should stay focused on oil.”
The brand manager went away for six weeks and came back with mock ups of possible packages and samples of the foods to taste.
The general manager said, “We need to do this. I’ll give you the $1.4MM you need for the test, but no people.”
The brand manager proceeded to launch eight flavors of salad dressing, three flavors of cooking sauces, one cooking spray and a mayonnaise all with a Puritan Canola Oil base
He got other P&G people to volunteer to help manage the effort (in their spare time.)
They outsourced R&D, production and sales, using the money they’d been allocated.
While the real objective was to enhance the Puritan Cooking Oil brand by offering products including Puritan Oil, different things happened with the different products.
Within six weeks of the start of the mini test market, Kraft launched a Kraft Canola Oil in the mini test market. The P&G people took that as a signal that Kraft would prefer P&G not mess with their salad dressing category. P&G opted not to expand the salad dressings.
It turned out the world did not need another mayonnaise. The world was very happy with either Hellmann’s, Best, or Miracle Whip
On the other hand, there was a real need for a safer, healthier cooking spray. So, P&G expanded the cooking spray.
And people loved P&G’s new cooking sauce flavors. So, they expanded them.
For the expansion, P&G bought new machines and built new lines in its plants and then leveraged the existing sales teams.
Implications for you
Free up financial first. This sets up other options. For other options,
“Leverage” internal resources already in place – generally most efficient overall.
“Rent” other resources by outsourcing or partnering externally – limits risk.
“Buy” other resources either outright or in joint ventures – requires longer-term commitment.
“Build” resources – generally takes longer.
Click here for a categorized list of my Forbes articles (of which this is #848)
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