Great Lakes Training
& Consulting, LLC
“The Lighthouse” – An E-Newsletter
February 2008
The Three Laws of Resources
Last week I was presenting a two-day program in project management and was having a discussion with one of the participants after the first day. She was lamenting that her company had so much work to do. She said they had customers that were asking for their services, but they were so short of staff, particularly engineers, that their customers had to wait longer than what was really acceptable to get their work done. I commented that it seemed like the company should add more staff and recruit more engineers if they had such a demand for their work. I suggested that they may lose some of these customers if they didn’t respond to their needs in a timely manner. She said the engineers they needed were in short supply and it wasn’t easy to recruit them. When I asked if they could bring in temporary help to do some of the non-engineering tasks that the engineers may be doing, she said they had been told that was not an option.
Obviously I did not know enough about their operation to be of much help in such a short discussion, but it got me thinking about the whole issue of resources and their availability. I have lost count of the number of times I have been told there are not enough resources (people, machines, computers, or some kind of widget) to accomplish the work that needed to be done. If there is one constant thread in any conversation about the difficulties of work, it is the shortage of ‘stuff” to do the job.
In the February 2007 issue of Quality Progress, Jack Dearing wrote about ISO-9001 and how to make it better. In his discussion of this quality management standard he referred to the Three Laws of Resources.
- Resources are finite. Once they are used or in use, they are not available for another use.
- Well-spent resources add value. In the example above, how much more value would this company have delivered to its customers if they increased the resources to increase their responsiveness to customer requirements?
- A wasted resource has two negative impacts. First, the waste itself; and second, the good that could have come from the resource.
Many companies, like the one mentioned above, are operating at 100% of capacity. While this is good in one way, it is bad in another. When you are operating at 100% you are certainly making maximum use of the committed resources. The downside is that you have no reserve capacity to deal with problems or to take advantage of an opportunity. On the battlefield, it is a poor commander that does not maintain a reserve force to commit to the battle at the critical time and place, in order to influence the outcome in their favor.
When companies operate at 100%, they have no reserve. As a result they have lost the ability to influence the situation to achieve a positive outcome. I’d like to use the above example and make some assumptions. Let’s assume that the engineers perform some duties and tasks that have nothing to do with their engineering duties. I think this is a fairly safe assumption to make, because I have never seen anyone who didn’t have some “other duties as assigned” in their daily workload.
The engineering resource is finite. They have a set number of engineers and they have difficulty in recruiting new engineers of the caliber of their current staff.
If they were to use current financial resources to hire temporary or permanent staff to perform some of the non-engineering “other duties as assigned,” then the engineers to work on customer requirements with a faster response time. Eventually, the customers look for another supplier who can meet their needs in a timely manner.
Not using financial resources to add additional staff means the financial resources are not being spent on what must be done to meet the customers needs, and the customers will continue to wait longer than they desire for the requested services.
Certainly no business can afford to squander their resources, and any smart business will maintain financial reserves to be drawn on when needed. However, just like the commander on the battlefield, they must be prepared to commit their resources, their reserve, at the critical time and place to achieve a positive outcome. History is filled with examples of military reserves being used piecemeal with little to no positive impact, or being held in reserve too long and not being committed when they were needed. The history of business is also filled with such examples.
The third Law of Resources states that a resource that is wasted has two negative impacts. A reserve can be wasted if not used, and once wasted, is not available to be used again.
Copyright by Great Lakes Training & Consulting, LLC, DeWitt, MI