Simple resource allocation decision rules can help minimize political infighting because they change the burden of proof from the typical default allocation (“what we did last year”) to one that makes it impossible to maintain the status quo. For example, a simple harvesting rule might involve putting a certain percentage of an organization’s portfolio up for sale each year to maintain vibrancy and to cull dead wood. Another approach we’ve observed involves placing existing businesses into different categories—such as “grow,” “maintain,” and “dispose”—and then following clearly differentiated resource-investment rules for each. The purpose of having clear investment rules for each category of business is to remove as much politics as possible from the resource allocation process.
Source: “How to Put Your Money Where Your Strategy Is”
Original Publication: The McKinsey Quarterly
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