How to Allocate Your Most Precious Resource
Years ago, I was privileged to be business manager for the great Roy Rogers, the beloved actor and singer known as “The King of the Cowboys.” It was late in his career, and Roy didn’t have his same old energy and enthusiasm for rodeo appearances and movie roles; lucrative as they were, they were also physically demanding. So we came up with alternatives like autograph sessions, merchandising, and commercial tie-ups. Lo and behold, after analyzing our financial results, we discovered our own astonishing version of the 80/20 rule. Even though the alternatives took only 20% of Roy’s time and energy, they brought in 80% of his earnings!
Seeing the 80/20 rule proven once again in such stark fashion made a strong impression on me. And it illustrated a corollary business rule: One of the most important decisions business leaders make is how to allocate their scarcest valuable resource. My scarcest valuable resource was Roy’s energy. I had to allocate it in a way that would earn the best return on his investment.
If you’re a farmer, your scarcest resource is tillable acreage, and your income depends on how well you allocate it among various crops. If you’re a manufacturer, your scarcest resource might change from time to time – factory capacity, raw material availability, qualified labor – but you had better be flexible enough to identify it. If you’re a lender, your scarcest resource is capital, and you need to make sure it goes where it will safely earn you the greatest return.
But no matter your industry or company, there is one scarce resource almost all business leaders have in common – their time. Who among us ever has enough time to do all that we would like to do? Since we don’t have enough time, we need to make firm distinctions on how we will allocate our time in the same way we would allocate our other scarce resources. We need to carve out what I call our “Critical Few” from our “Minor Many.”
Our Critical Few are those which, if we neglect them, will have dire consequences for us, whether in business or our personal lives. Our Minor Many are not necessarily insignificant, but they can wait, and their neglect might be disappointing but not dire.
Personal preferences can complicate our reasoning. I get great intellectual stimulation from floating new ideas with my team, and I consider time spent this way to be of the utmost importance. One of my colleagues likes to work out problems alone, doing solitary research. Another likes to solve business problems by putting a pencil to them – working them out in financial terms. Who doubts that these preferences cause all three of us to consider work that we enjoy to be more “critical” than work we dislike?
So, to separate our Critical Few from our Minor Many, the first step is to subject our too-long to-do list to an 80/20 analysis that obviates personal preferences: Which ones deliver more value than the time, energy, and expense it takes to accomplish them?
Next, we can apply the Important vs. Urgent Test, taking care to apply it objectively to our own situation and needs. We all know people for whom almost everything seems urgent. When my wife answers calls for me at home at inopportune times, she has a habit I value of cupping her hand over the phone to whisper a reminder to me: “He says it’s urgent, but it might be HIS urgent and not YOUR urgent.” Only those items that are urgent to both parties belong in our Critical Few.
So let’s say now you know your Critical Few. When was the last time you had enough time for all of them? Prioritizing them is next. If you can’t get them all done, to which do you allocate your time first?
Prioritizing can be tricky because your Critical Few are dynamic. A task can shoot from the bottom of the list to the top, depending on the circumstances. “Touch base with top client” takes on new meaning if you suddenly learn that “top client” is thinking about switching to a competitor. “Write speech for tonight’s club meeting” can plummet from number one to off the list if a catastrophe unfolds in one of your stores.
The things that compete for our time make different appeals – to our brains, our hearts, our pocketbooks, and even to our vices. Intellectually you might know perfectly well that your Critical Few for the day need to include reviewing the board meeting packet before the meeting. But that’s tedious, and you’d rather brainstorm with your production manager about an exciting idea for improving the manufacturing process. Should you take a customer road trip with your sales manager, or spend time with disgruntled employees who are resisting your enterprise-change-management initiative?
I don’t know the answer for you. But I do know a reliable method for arriving at the right conclusion. I call it the Given Reality Test.
“Given” because our Critical Few don’t appear in a vacuum. We develop them based on some givens – assumptions accepted as facts. There’s a due date we can’t change. We have role-based responsibilities that are inescapable. If your daughter is counting on seeing you on the sidelines of her soccer game, sending your assistant is no substitute. If you’re the corporate lawyer, you have to read the regs. If you’re the press liaison, you have to return that reporter’s call.
“Reality” because our wishes don’t govern our surroundings. Reality persists in defining what we can and cannot do. We might wish we could enact culture change overnight, but reality says otherwise. We wish our family commitments would not conflict with our work priorities, but often they do. We wish our strategy off-sites didn’t get interrupted by urgent calls from clients, but they usually do.
“Test” because testing means we don’t have to choose the wrong Critical Few and experience the bad effects before realizing we made a big mistake. We can put our toe in the water and then decide if we want to proceed.
Here’s how the Given Reality Test goes: First you define the problem clearly in your own mind. Then you articulate and calculate the effects of not doing each of the activities that is demanding your attention. When you analyze those effects, you’ll end up clear and committed as to what your priority should be. If circumstances change, you might have to repeat the Given Reality Test, but it still works.
That’s the process in the abstract, but let’s give it some color – some context so that you can apply it in your own circumstances. Let’s say you have three activities vying to be your Critical One for an afternoon. 1) Keep your promise to attend your best friend’s gallery exhibition. 2) Participate in an impromptu meeting called by your biggest distributor who is getting customer complaints about your products. 3) Try to get in and see your doctor about a worrisome pain you noticed earlier this week and haven’t had time to deal with.
1. Define the problem: I can’t be three places at once. So I have to tolerate two of the following: keenly disappoint my best friend, push the distributor problem on to a colleague, stress out about that pain.
2. Calculate the effects of not addressing each of them now: My 30-year friendship will not be altered by a single disappointment. This distributor wants to be heard and acknowledged, not fire us, and my colleague is a better listener and relationship builder than I. This will be my fourth sleepless night worrying about what that pain could portend – I’m too worried to enjoy the exhibition or even pay attention in the meeting.
So, there’s your answer, inescapably: Go see your doctor. It might be a different answer for somebody else, or different for you if the circumstances were slightly altered. But articulating the effects that way is its own revelation. It keeps you from ruminating in endless circles that all start out with “But maybe I should…” It lets you arrive at a conclusion that you can live with about how to allocate your afternoon.
These tools – the 80/20 Analysis, the Important vs. Urgent Test, and the Given Reality Test – can clear up those complications and make sure you allocate your time and prioritize your activities wisely.
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About Edward G Brown
Edward G. Brown had no time to write this book, which is exactly why he wrote it. Bronx born and bred, he co-founded the #1 firm in culture change management consulting and training for the financial services industry, Cohen Brown Management Group, now in 50 countries and 12 languages. Its past and present clients include…