Resource Allocation

Resources is a limited commodity. Everybody has limited resource. Take most of the companies and they will tell that their cash flow is very tight and that they need money. Unless of course, they have reached a steady state. A state from which they do not want to grow, but just want to consolidate. For someone, 1 lac might be a big amount but for some other person even 10 crore is small amount. All these definitions change with time and from person to person. But for all those persons, one thing is constant that they feel that they need more money. The fact is that your point of view changes as soon as you see money flowing in. If you want to start a project with Rs. 5 lakh but you get Rs. 20 lakh, the plan changes. May be your project remains the same, but the execution style will change. When resources are scarce, you tend to make good utilization of them. However, if the same resources are plenty, the efficiency reduces.

To make my basic point about today's topic, I would give one hypothetical example. A & B start a project with same amount 5 lac. But by the end of the year, A is struggling, while B has grown into 20 lac enterprise. While the reasons might be different, but main factor could be optimum use of resource. I have written this example in one of my earlier blogs too, but this example is special. When IPL had just started, Bangalore's team was mocked as a Test team by many. In the second IPL, Rahul Dravid was leading the side. I don't remember the exact numbers, but Bangalore had lost too many matches. Probably, 7 out of the 8 matches. Then, management changed things. They brought Kumble as captain. And with the same resources, Kumble won many of the next games to finish in the Top 4. This is what I call proper use of resources. There is nothing to take away from Rahul Dravid as he latter proved himself to be made of same stuff with Jaipur. 

There are similar cases when people with enough money have launched such businesses that they failed miserably. While there are other people who started with very limited resource, but have rose like a star.