25 April 2006

Resource allocation

As a businessperson and former business major, I often talk about the allocation of resources. I like the ideology that in a pure supply and demand economy, resources will find the best opportunities. I believe this. But, I do not believe we live in a world where the consumer (demand) and the supplier (supply) effectively meet to find equilibrium (optimal value or price). Unfortunately most of our distribution and delivery systems are convoluted. This allows opportunity for manipulation, and we have a harder time reaching that optimal cost, value, price point. Some markets (commodities, stocks, etc) do reach equilibrium very quickly, but the majority, healthcare for instance, does not.

So what constitutes a resource? I believe that it is a combination of elements that fall into these five categories: money, time, materials, energy and passion. Notice that energy and passion are separate… this is significant. A careful evaluation of the combination and proportions of these resources can tell you a lot about the motivations and goals of those investing.

Why is this important? The design, marketing and strategic efforts within an organization are highly dependent upon the allocation of resources. More does not always make for a better outcome. Many times it is the proportional composition of those resources that impacts the quality of solutions and the success of a project. I think that this is an important observation for the astute designer.