Ильдар Хусаинов – The power of freedom (страница 9)

I realized the importance of a resource-based approach. This approach is rooted in the understanding that everything we possess is a resource that should be used efficiently and beneficially for all parties involved. After all, in the end, we are managing resources.

Effective management is the ability to configure a system so that resources are utilized in the best possible way. There are many starting points in management: you can begin with resources, clients, stakeholders, business processes, or performance metrics. For me, management has always been primarily about the efficient use of resources.

I identified a flaw in my own working algorithm – funneling efforts in the wrong direction and inefficient resource allocation. Then I realized that this isn't just my individual case; many leaders make the same mistakes.

A good example of effective resource allocation can be seen in a well-organized construction project. Some builders may take three years to complete a 16-story building, while other companies can finish the same project in just eight months. As a result, the latter not only completes the project faster but often does it at a lower cost and with better quality, thanks to their efficient organization.

Every morning, I walk past a construction site and see the same scene. At 7:30, the workers are already lined up and receiving instructions to be fully prepared and ready to start work by 8:00. The equipment is well-maintained, everything is new, and there are no delays.

The same applies to business. Resources operate on similar principles. Sometimes, the resources themselves indicate that they are being used inefficiently. For example, when we talk about human resources, high employee turnover is a sign that we are not utilizing our staff's potential effectively. Similarly, when it comes to financial resources, a lack of profitability or high operational costs are also indicators of inefficiency.

There still aren’t many books about resource management, but it has a promising future. It's essential to consider both the core and resource business models, as they always intersect. The more dimensions you analyze, the better you'll understand your company and see its potential.

To avoid mistakes in resource management, it's important to understand the three key aspects that influence a manager when making decisions about resource allocation.

Earlier, I mentioned that companies operating in the same industry often copy each other, including their resource allocation methods. We tend to stick to traditional ways of doing things, which can hinder our ability to make the right decisions. This is how the human brain works: if you ask it to imagine a non-existent animal, it will combine parts from real ones, like drawing an elephant's head and a tiger's body. The same applies to resource distribution; there may be a temptation to adopt the strategies of other companies or the industry as a whole. However, if we rely on old methods to solve new challenges, we risk falling behind. This is one of the most challenging management traps, and finding a way out is nearly impossible. This is the fear of loss and the instinct for self-preservation that don’t let you make a decision. So how do we tackle this and create a powerful system? The answer lies in effective resource management.

As an example, I’d like to share my experience during an audit visit to one of the company's branches. We started looking into the staffing levels, and I found that they had four finance specialists and only one HR professional. In our industry, it should be the other way around. Only when I asked the branch manager why this was the case did he realize it was a poor management decision. I can speculate that this imbalance might be because the manager’s got on well with the finance team, or perhaps he has a personal interest in finance. Besides, HR is often seen as a complex and unclear area for professionals in our field, which requires bringing in people with different skill sets. The manager simply doesn't understand the criteria for selecting such individuals, how to train them, or what metrics to set, which ultimately leads to this distortion. This is a typical example of ineffective resource management.

Different types of resources yield results within varying timeframes, and it’s not always possible to predict their long-term effects. A deep understanding of the structure and potential of each resource is essential to avoid making decisions based solely on short-term gains.

Overall, effective resource management requires not only an understanding of the current needs of the business but also the ability to anticipate future trends and adapt to them. This is the foundation for building a sustainable and dynamic business.

Types of resources:

• financial;

• material;

• human;

• intellectual;

• technological (figure 1).

Figure 1

Resource Characteristics and their Contribution to Company Development

Financial resources are utilized according to the needs of the company and are often directed towards generating profit, although they are not always directly linked to it. Finances can be employed in various forms to support three main types of resources: human, material, and technological. In this context, it's crucial to understand how to effectively manage financial resources; it may even be beneficial to establish a dedicated department for this purpose.

Finance plays a dual role in business. On one hand, money allows for the acquisition of resources; on the other hand, it is itself a valuable resource. While having funds in accounts is always important, I have never seen it as the primary goal of management. I believe that making it the main objective is a misguided focus that can often lead one astray. I have always viewed the company independently of its financials. I am convinced that profit is simply a byproduct of effectively managing the underlying processes that drive the company's operations.

If we draw an analogy with a football match, financial resources are like the score on the scoreboard; the real action happens on the pitch. If you focus too much on that number, you might lose sight of what really matters. It's important to concentrate on effectively utilizing all types of resources to achieve the desired result on the scoreboard.

In our business, we place a high value on human resources, as they account for 70% of all our assets. This means that people are our top priority, and we design all our systems around this resource. We often discuss where to direct our attention and resources, and we conclude that we need to invest more in partners and entrepreneurs, as well as in the funds that support them.

Salaries are worth mentioning as well. Currently, they are not very high in Russia, but I’m positive that this situation will change soon. I would even venture to predict that by 2030–2035, the value of human resources will significantly increase. I hope this book highlights an important aspect – the necessity of sharing success with employees and creating new business models. This way, businesses will transform, and competition will naturally elevate the entire system to a new level.

The value of human resources is significant and will continue to grow, so it's crucial to keep the focus on people, especially if this type of resource is primary for your business. On the other hand, it's perfectly acceptable to seek external financing for specific goals. For example, construction companies often take out loans that are 100 to 150 times greater than their own capital, and they successfully execute projects. They are not afraid to take risks because they know exactly where the value lies and how to leverage it.

Material Resources. I would rate their importance as three out of five. I don’t deal with the administrative and operational aspects, nor do I hold meetings about it. At one point, I delegated the management of this area to a truly reliable and talented person, and I haven’t revisited the issue ever since, as I don’t see the point. Instead, I focus on the technological aspects, which are extremely important in our field and deserve a five out of five rating in terms of significance.

Every industry has its own system for resource allocation, and it’s crucial to understand where to direct efforts to realize potential. I've seen leaders who take part in choosing office furniture or purchasing computers. I believe that’s inefficient. A leader should be where they can provide the most value to the business, regardless of company size. Every entrepreneur subconsciously understands the profitability of different resources. Take our real estate business, for example. We have an overall structure of income and expenses, and the simplest method for evaluation is analyzing return on investment (ROI).

But honestly, it’s hard to imagine that investments in material resources could be highly profitable if other resources remain unchanged. I like a method I call “taking the situation to absurdity.” Let’s say we only invest in material resources and start by buying new desks. We won’t hire new agents or invest in their training and development; instead, we’ll buy desks made of gold. Will this help our business grow? No. The desks will be there, and their utility will be zero unless we sell them later. Now let’s consider another scenario: if we actively invest in developing our staff, nurturing professionals in their fields, while changing nothing else, our profitability could immediately increase by 20%.