We had just killed off a software project that cost us mid six figures. Nothing to show for the entire project except knowing what was NOT a core competency in our company and delivering a good dose of humility that I needed.
The project was a heart attack to our company. Our heart was pumping harder and harder to get results for our main business and the new software. Unfortunately, I saw immense opportunity and got stars in my eyes and it clogged up our workflow and slowed the company to a halt in terms of productivity and profitability.
The problem (squirrel!):
New is sexy. New needs energy. New needs ideas and love and, as the person running the company, we spend a lot of time in the future while managing the now. It’s only natural that you have new ideas that could impact the organization in a positive way. Heck, that’s how the company got to where it is today.
What’s the problem with new ideas and future? That’s my job right?
You bet. But you are also responsible with managing the risk of those ideas. And that’s where the problem really begins. Risk is what got you here. Betting big is how you gain the biggest reward and also how you learn your hardest lessons. As your business grows, learning hard lessons has larger ripple effects that can damage more than just your bottom line. It could also hit your people, culture, customers, vendors, and partners,
How do you assess new opportunities?
After our big debacle, we needed a way to vet ideas in a group in order to decide which ones were worth pursuing. This idea alone was a great step forward because I took myself out of the “trying to convince” mindset and let the idea win or lose on it’s own merit. I was still the decider, but this took a ton of my bias and initial excitement away.
We ultimately ended up with 5 questions that provided a framework for those executive team discussions. Yours will probably be different, but the concept is the same. We found out that we should probably say no 80-90% of the time OR that that idea was good but we should execute it differently, or at a future date.
Does the idea fit with our Vision, Mission, Values, Core competencies?
It’s amazing to me how often we would stop right here. Great idea, not what we do for a living. doesn’t fit who we are or want to be. Probably an idea for another company.
What is the opportunity … Specifically?
Will it increase sales or size of your market? Great. How much? Based on what data? Will it reduce time or expense or headaches for you or your clients. Great. How? Will it increase your moat? (your unique ability to compete in the market that is hard to replicate).
Are we passionate about this? Do we like the idea, product, service?
If the team doesn’t see the vision/opportunity, it will die before the first meeting
What are the risks?
On a scale of 1-10, how risky is it? Can you mitigate those risks? Is it worth it?
If we decide to move forward, what are we NOT going to do in our current plan?
There is only so much time and effort. You already have a strategic plan and it’s full. What’s moving down or off the plan for that year that this idea is so good it should replace? Or, should we add it to the list but for another time?
These questions are not about control, stifling creativity, or limiting opportunity; The point is to get out of the shiny object zone and get into a healthy business conversation.
What other questions would you add?