Resource Reallocation Velocity Is Quietly Becoming the Strongest Predictor of Strategy Impact

What’s happening

A new pattern is emerging across large organisations: strategies aren’t failing from poor design, they’re failing from slow reallocation. McKinsey’s latest capital agility research shows a stark divide: companies that reallocate >8% of their resources annually outperform peers by 30%+ in TSR. Yet most organisations still move only 1–2% a year.

Inside strategy teams, the symptoms are obvious:

• Funds approved but not released

• Talent tied up in legacy portfolios

• Transformation teams waiting for “next quarter’s cycle”

• Digital initiatives paused due to capacity, not value

• High-priority bets stuck behind BAU commitments
  

The strategy is clear at the top. The intent is strong. But the organisation can’t shift resources fast enough to match its own priorities.

Why it matters

Reallocation speed is now a hard constraint on execution.

When resource shifts lag strategic shifts:

• High-value initiatives miss windows

• Transformations slow to a crawl

• Cost programs hit targets but kill momentum

• Teams hedge, spreading themselves across too many priorities

• Leaders quietly preserve legacy budgets “just in case”
  

The result: a strategy that looks decisive on paper but moves sluggishly in reality.

Strategy today isn’t about creating focus, it’s about enforcing it. And the enforcement mechanism is resource reallocation velocity.

What to do next week (3 moves)

1. Run a 30-day Reallocation Audit Pick one strategic priority and map:

• budget committed vs. actually released

• FTEs committed vs. actually assigned

• time from decision → redeployment

Anywhere the lag >30 days is where execution is silently breaking.

2. Set a “20% Flex Rule” for teams Every strategic team should have 20% of its capacity uncommitted for rapid redeployment to priority initiatives. This doesn’t reduce output, it prevents strategic paralysis and eliminates the “everything is already allocated” excuse.

3. Move from annual to quarterly capital refresh cycles Shift from once-a-year planning to lightweight quarterly reallocation forums where leaders can:

• stop low-yield work

• shift capacity to in-flight bets

• pull resources from stalled initiatives

• double down where value is proving out
  

The goal: make reallocation a normal operating rhythm, not a political event.

If strategy is the intent and execution is the motion, resource reallocation is the muscle. The organisations getting impact aren’t planning better, they’re moving resources faster.