Resource Allocation
Level 3: Master Of Mundane
Future Guardian,
What could you do with an extra 2 hours a day? What about an extra $10,000 a month? There is an endless amount of possibilities that might be missed because of improper resource allocation.
Now, what does "resource allocation" mean?
In this Guardian Academy article, we will explore this concept while building upon our previous core concepts of recapture and reallocate1 as well as solving for your priorities through your Solvable Problemâ„¢2.
The end result? Helping you to get closer to what truly matters in your own life.
The Reality
Let's face the facts:
Many folks tend to wear rose-colored glasses when it comes to their resources. Take, for instance:
Time optimists- People who pack their schedule to the minute.
Financial optimists- People who budget everything to the penny.
However, it's crucial to acknowledge some harsh realities that these optimists often overlook:
Reality 1: Time And Randomness Are Undefeated
This was first introduced in a TGA core concept training: Engineering Luck3.
Time optimists overlook the unexpected, like traffic jams or delays, and financial optimists underestimate the unpredictability of events like a COVID-19 pandemic. When time and randomness work against you, it can quickly lead to unfavorable outcomes.
Reality 2: Resources Are Not Unlimited
We must operate within the bounds of reality, where resources are not infinite. This means you can't work endlessly, test advertising endlessly until you strike gold, or maintain peak energy indefinitely. Accepting these limitations is the first step to resource optimization.
Find Some Shade, Sit The F* Down And Drink Your Water
Here's a real-life story that demonstrates how understanding resource allocation can lead to victory, even if you're not the absolute best at something.
Picture this: Over a decade ago, Nic Peterson4 was competing in a professional strongman competition, an event for the toughest of the tough. One of the world's top competitors, Vince, offered to coach him through the contest.
The competition took place outdoors in the scorching Florida heat. Nic was walking around and observing all the other competitors jumping up and down trying to psych themselves up before the events.
Vince asked "What are you doing?"
Nic- "Just walking around."
Vince, seasoned in the ways of resource allocation, delivered a lesson that would prove invaluable. He told Nic, "This is why you're an amateur. Find some shade, sit the F down and drink your water. If you want to win you need to win all these events, every ounce of energy you spend standing around is energy not going to those events."
The result? Nic went on to finish first, not because he was the strongest, but because he had a mentor who understood the art of resource allocation. While his competitors burned precious energy in hyped-up excitement, Nic conserved his, staying relatively consistent throughout each event while his rivals faded fast
Resource allocation can be extremely powerful in all aspects of your life if used properly.
Reallocation And Priorities
One of the fastest way to recapture and reallocate is from your own priorities. When you prioritize without a consideration to resource allocation, time, and randomness you'll fight an uphill battle.
Let's walk through a standard thought process commonly found outside of TGA of how to achieve what you want:
Scenario 1
Priority 1- 33%
Priority 2- 33%
Priority 3- 33%
In 9 years you will have funded your Solvable Problemâ„¢. The more priorities you have the less resources you can allocate toward each in this process. If you had five priorities each would receive 20% of the allocation of your resources. This doesn't account for time and randomness.
Scenario 2
Priority 1- 100%
Priority 2- 0
Priority 3- 0
You can recapture the resources you were spreading out across the other priorities and put them toward the most important priority. Once that is completed you move onto the next one. In 9 years you will still have funded your Solvable Problemâ„¢.
What's the difference between the two scenarios if you end up fully funding your Solvable Problemâ„¢ in 9 years? The chart below will be a great visual representation.
Comparison Of Scenario 1 & 2
In 3 years you have nothing locked in for scenario 1 because you are spreading your resources equally 33%. In six years you have nothing locked in for scenario 1. In 9 years you will have funded your Solvable Problemâ„¢. This means that in 9 years nothing terribly unexpected can happen.
Compare this with scenario 2, in 3 years you'll have priority 1 locked in. If something unthinkable happens at year 5 you still have two priorities to solve for, but you at least have the most important one locked in. In 6 years if everything goes according to plan you have your top two priorities locked in. If on year 7 something like COVID hits and you lose your job, well at least you still had the first two priorities funded and can figure out the final one when things calm down.
As opposed to scenario 1 if COVID hit on year 7 you would have nothing funded and now a bigger amount of stress as you have no current perceived way of finishing all three priorities.
The best case scenario at year 9 is the same across both scenarios but what we have done with scenario 2 is locked in better worst case scenarios.
Same upside, less downside. Engineering asymmetry to the upside, by systematically removing downside by recapturing resources going to other priorities and reallocating to the most important priority.
It may look great on paper to be funding six different priorities all at the same time and maybe eventually completing them all, but this is a very fragile framework with a higher probability chance that you get none of them completed.
Recapture from lower priorities, reallocate to higher priorities
This will come as a gut check if you are hesitant to remove resources from lower priorities to devote to your higher priority (it might not actually be as important as you thought).
The Barbell
The barbell is a bimodal framework that we can utilize for risk mitigation. There is a reliable side and a side for asymmetry to the upside. Anything in the middle is pointless.
An example of something in the middle:
You bet a dollar to get a dollar but you aren't actually sure if you will win. You could reallocate that dollar to something more reliable or something that may produce more upside. If this is happening in other areas of your life you can look to reallocate some of those resources. There are many versions of the barbell across various domains. In computer science, it's termed explore and exploit.
Should I spend more time finding more (explore) or do I lock in what I already know (exploit)?
This will be the barbell we focus on today which comes from medicine.
If 5 mg of an antibiotic will cure you, the minimum effective dose (MED), and you take 10 mg of the antibiotic you have now moved yourself to the middle of the barbell. Same outcome but now you take on more risk.
Your goal is to maintain the way you look. You currently exercise 5 hours a week, but using the science of hindsight you would maintain how you look with just 3 hours a week. To change the way you look you would need to exercise 7 hours. This would mean at this point with your current goal you would be wasting 2 hours a week which you could recapture and reallocate to a priority that would be more effective.
I Want To Improve My Business
Let's say that your business is not getting much better, your fitness has also been about the same, and your relationships aren't getting better. You decide that your business is the most important aspect to you right now and would improve other domains if solved. You can evaluate how many extra resources you are putting into exercising and your relationships that you can reallocate.
This might sound "bad" to remove resources from relationships but the fact is you are maintaining them simply by being in the middle anyways. You are now finding what the MED for exercise and relationships are so that you can recapture those resources.
By recapturing those resources you can reallocate it to your business, moving it toward MRV (maximum recoverable volume), so that you can actually make a difference.
After time has passed and your business is where it needs to be you can now figure out the MED for your business and reallocate those resources to improving your relationships.
Bonus- Setting Sustainable Goals
There is actually a prioritize, recapture, reallocate resources toward behavior.
Here is an entire extra training on setting sustainable goals in the link below.
https://thesuccessfinder.com/knowledge-center/interest/detail/635419e30168c80018b079af
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6WU: Wisdom Comes From Multiple Perspectives
Can you summarize your thoughts after reading this into six words? This will help with your overall learning process. After you've done this read through what others have wrote as wisdom comes from multiple perspectives.
https://twitter.com/TheGuardianAcad/status/1612888961734823938?s=20&t=Js0tMYe3BHoVdj5y1NbSpQ
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Priority to mrv, else to med