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Create internal markets for ideas, talent & resources

“Organizations need a resource allocation process that more accurately mimics the selection pressures of a real market.”

Funding decisions in corporations are usually made at the top and are heavily influenced by political factors. That’s why companies over-invest in the past and underfund the future. By contrast, resource allocation in a market-based system like the New York Stock Exchange is decentralized and apolitical. While markets are obviously vulnerable to short-term distortions, in the long run they’re better than big organizations at getting the right resources behind the right opportunities. To make resource allocation more flexible and dynamic, companies must create internal markets where legacy programs and new projects compete on an equal footing for talent and cash.

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5 Barriers

Create internal markets for ideas, talent & resources

“Organizations need a resource allocation process that more accurately mimics the selection pressures of a real market.”

Funding decisions in corporations are usually made at the top and are heavily influenced by political factors. That’s why companies over-invest in the past and underfund the future. By contrast, resource allocation in a market-based system like the New York Stock Exchange is decentralized and apolitical. While markets are obviously vulnerable to short-term distortions, in the long run they’re better than big organizations at getting the right resources behind the right opportunities. To make resource allocation more flexible and dynamic, companies must create internal markets where legacy programs and new projects compete on an equal footing for talent and cash.

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I've always admired CEOs who forgo multimillion dollar salary payments, like Jobs at Apple,but if you drill into the pay-scales at the top companies, you can seethat executive compensation has, well f
Barrier by Aaron Anderson on April 27, 2011
Zero-sum budgeting has long been the practice for university &college operations, particularly in the public sector.  Essentially,when the city, county, and state governments are generating p
Barrier by Aaron Anderson on April 28, 2011
The mass retirement of organisations’ current leadership over the past few years, has and still is putting pressure on organisations, to re-examine their recruiting strategies to ensure that the a hig
Barrier by Busi Nkosi on May 4, 2011
Recession disallowed growth in certain industries. This saw a learning stagnation for years not enabling a role enhancement, especially in the knowledge based industry.
Barrier by Radhakrishnan NR on November 30, 2010
While so many of us acknowledge how critical it is to have systems thinking in order to maximise productivity in organisations why is it that systemic shut down of skills prevails?
Barrier by Eldo Kurian on October 28, 2010