Leaders are regularly inundated with proposals seeking sponsorship, be it for business growth (say entering new markets/new product line) or organizational strengthening (say restructuring, ERP implementation etc.). Almost all of these proposals promise significant pay-offs- supported by some sort of financial numbers and assumptions that are acceptable (but not likely to be showstoppers). It is quite clear that proposal owner has developed a case and is interested in winning sponsorship by bringing all convincing abilities to board. How does one ensure that right decisions are made without getting sucked in well rehearsed story telling? Here are three questions that help:
WHERE is the payoff? Is it directed to solving comprehensively the top most problem/ capture most promising opportunity? Or is solving partially motley of problems/ capturing list of mediocre opportunities? The second scenario happens, when the main payoff falls short of the hurdle rate, and peripheral payoffs are attached to make the overall proposal acceptable. Management often agrees to the second option, with a view to handle multiple situations in one go and please multiple stakeholders, but it rarely works out that way.
Why will WE succeed? Is it because we have the execution capabilities – technology, geographical spread, expertise, access to capital/market or because we generally believe we are smart enough to make it work and optimistic in our planning? Amusing, but true, how often proposals reveal embedded beliefs that we can deliver better than competition and that what made us successful ensure continued success. Lessons learnt and best practice knowledge only enhances the probability of success but provide no guarantee.
WHY pilot? Is it to test the efficacy of an idea or refine the execution plan before overall roll-out? Pilot is often a compromised formula proposed by the proposal owner, so that it is not all or nothing as an outcome on something on which he/she has invested time and energy. Similar logic tends to influence leaders as well, who seem to be more comfortable going the pilot route. Pilots centered on testing an idea, often become battleground for competing egos, getting disproportionate attention, with both sides amplifying early signs of success or shortcomings. Also remember, if the idea is truly revolutionary, by pilot testing, competition is also given the heads-up to match up, when you roll-out completely. Piloting is different from developing solution iteratively (beta testing/agile way) in a well defined staged-manner with risk and return evaluations at various milestones, which seems to be sensible preposition given the high cost of failure and associated reputation risk.
No matter how rigorous the evaluation criteria are, the decisions of go/on-go can still go wrong. The above three questions can help understand the logic better. It may still be ok to take a counter view, even if the responses to above are not convincing enough- it could be context, power equation, culture, or leaders’ inherent preferences that can tilt the decision, but it pays to know.
Happy to know your views on above, or other questions that may help?
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