Welcome to this episode of the Agile People Fika podcast, where we
engage in an unscripted discussion about ‘Resource Allocation Budgets
versus Prioritizing Flexibility with People’. This insightful conversation
among Agile People team members and guest David Thompson delves
into the fundamental question of whether organizations should measure
value or costs, particularly in the context of IT departments.
The dialogue opens with an examination of the drawbacks of rigid
budgets in stifling innovation and flexibility. One example cited is a team
with a potentially valuable innovation but constrained by budget
limitations in their specific ‘money bag’, hindering the project’s fruition.
This example illustrates how budgets can lock teams into a non-
innovative mindset, focusing solely on meeting deadlines set by
predefined projects.
The conversation then shifts to the idea of dynamic resource allocation,
which could be more effective if not constrained by fixed performance
targets. This approach would allow resources to be shared where
needed most, promoting efficiency and adaptability. The panel
discusses the challenge of convincing those who control budgets
(‘money bag holders’) to embrace this fluidity, acknowledging the
inherent fear of ‘going crazy’ or losing control.
Addressing the notion of control, the discussion highlights the
importance of adapting to reality rather than adhering rigidly to plans
made in the past. It’s argued that using resources where they’re most
needed at any given time is a wise and responsible approach, as
opposed to the false sense of security offered by fixed budgets.
Further, the panel delves into the idea of agile for finance, emphasizing
the need to shift from traditional budget rituals to more adaptive, reality-
based planning. This includes acknowledging the unpredictable nature
of the business environment and the impossibility of controlling complex
human systems. The concept of ‘value creation’ versus ‘cost
management’ is also explored, suggesting that organizations should
focus on potential value rather than just costs.
The discussion also touches on the tendency of organizations to stick
with projects in which they’ve heavily invested, even when it’s more
sensible to abandon them. The benefits of small, focused teams over
larger, less cohesive ones are considered, along with the need for agility
in resource allocation and decision-making.
Towards the end, the conversation steers towards practical steps for
traditional organizations to transition towards more flexible resource
allocation. Suggestions include questioning annual budgets, making
changes as needed, and avoiding rewarding people based on
performance against fixed targets.
The podcast concludes with an invitation for listeners to explore further
training with Agile People, highlighting an upcoming certification
focusing on agile for finance. This initiative aims to foster modern
leadership and governance for a more profitable and sustainable future.
Join us in this engaging Fika session to gain deeper insights into
navigating the complexities of resource allocation and prioritizing
flexibility in organizations.
