“So, what do you think this looks like in sales for this year?”
It seems like such an innocent question, and in the moment it may be. Once answered, however, it can be the nail in the coffin of a perfectly good growth initiative.
I call it the singularity paradox.
The language of established business is certainty, and at that moment, leaders can sound way more certain than they really are.
When a well-regarded leader in an established organization leads their first growth effort, there is immense pressure to do something “big” and “impactful.” The language of big and impactful in the established firm is financial – either in margin or sales.
There are any number of reasons for establishing the probable impact quickly. First, you are competing with a number of potential investments, all of which have very credible business cases. In addition, your leadership is used to simple quantification – not strategic questions.
Anything that is unforecasted is very suspicious.
When you name that first number, a significant number of systems kick in that remove a lot of options. Just to quickly summarize, that sales number gets entered into a plan, and your budget is determined by it. Profit expectations are likely determined from the business unit financials you are part of. You will begin to attract allocations from departments that will make no contributions to your effort, and in fact may slow you down.
I’ve seen a couple of early stage R&D programs get pulled into the singularity. Once the project success becomes defined as a certain sales level, the project lead, engineers and support members were committed to fulfilling that projection.
From that moment forward your strategic options are limited, and when it comes to decision making, you will need to chase that number, even though it may be exactly the wrong choice for the overall success of the effort.
What the Firm Really Needs to Hear
A much better (and more authentic) answer is this: “We have modeled it, and the range is positive $XX to zero, depending on (a list of key factors to be explored in the strategic work of the group).”
Of course to give this answer, you need to do the work.
A Process Tool to Get the Work Done
I’ve mentioned the STRIDE tool in other articles (here, here and here), which is something we use to create a manageable journey for the innovation leader to follow. The full journey includes five steps that move a project through strategic clarity, risk-based assumption testing and early, mid and late-stage operational integration.
Focusing on the left-hand side of the STRIDE journey includes explicit steps for determining the known unknowns and creating a stack ranking of risks that are material, first to the client, and second to the firm. There are three essentials that come of the strategic work on the left:
- A (customer) problem worth solving
- A market we can reach
- A solution we can provide
Each of these is important, but by far and away the answer to the first question, as spoken by the customer, is key: are we looking at a pain point that is so impactful, that even with the distractions and competing din of the current world we live in, the customer will invest good time, money and energy into solving?
The next key consideration is the market question – is it one we can know and reach? I see people breeze past this point over and over again, only to have real heartburn when they need to make significant investments to be able to really engage and address it.
Lastly, is this solution something we really have the competency and the will to do? You would be surprised at the number of established firms that have a prototype team that gets some initial traction, only to leave the early adopters high and dry when the demands on the firm increase.
Coaching Can go a Long Way
Avoiding the early commitment to an unrealistic business case is good for the firm as a whole. By systematically derisking the work, budgeting can be disciplined and proportional to learning which avoids the over investment in infrastructure and ancillary resources.
Using process to get after these questions early and thoroughly saves organizations significant time, money and resources. Without a systematic path, it’s not a question of if, but exactly how much will be invested.
If you’d like to get to work on a plan using STRIDE, please feel free to use this link to set up a call, or reach out to me directly at 847-651-1014.
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