Imagine yourself walking into a store – it’s filled with shelves and shelves of items that interest and excite you. Now if you are like me, you probably can not afford to purchase every single item. Even if you could, it is unlikely that you would since it would just be impractical – you would never have enough time to use each item and it would be a chore to get every item home. Plus where would you store it all when you did get home? Bottom line, no matter how attractive something looks, your resources are too limited to be unselective.
In business we are faced with opportunities every day (hopefully). However not all of these are worth pursuing. The more scarce your resources, the more selective you have to be. Seems logical enough but unfortunately too often employees are sent on wild goose chases tracking down leads that are neither strategic, profitable nor even possible.
These hopeless opportunities are what I call SODs. Some of you may know a sod to be a small rectangular block of grass. On its own it looks rather small and insignificant, but depending on how many of them you collect, you can fill an entire field with them. Hmm large grassy field eh? How can that be wrong?
Well when I speak of SOD I am not referring to anything grassy. I am alluding to what is usually left over when you chase down these hopeless opportunities. Sunk Costs, Opportunity Costs, and Disappointment. Similar to its grassy namesake, individually they seem harmless. However the more you collect, the greater the mass of unrecoverable costs, lost resource time and depleted morale to soil your company.
Effective decision making is the key here. Decision making based on business intelligence and shared strategic vision. There are many methods for evaluating the future value of an initiative that we all learned in business school. As well, there are all kinds of analytical processing systems that can be deployed that will supply teams with data to aid their decision making abilities. However what matters is that the system you use works for you. So if a whiteboard is all your team needs to make good decisions – roll with it.
I used to use an Excel spreadsheet that listed opportunities and calculated a score based on items such as:
strategic value resource availability expected profit expected revenue competition probability of success
These days I can store all of this information in a cross departmental list on a Sharepoint site so that team members and leaders can view what matters to them whenever they want to. As well I can make this information a lot more useful by using it as a launch point for some other processes.
Those are just some variables one could consider when evaluating opportunities, and each can have a different weight depending on how important they are to your company. By calculating a score, it becomes easier to be selective on which opportunities should be pursued by employees. As well, by considering items such as probability of success, competition and profit, you may notice yourself with a lot less SODs lying around – and that’s good for every company!
So the moral of the story – if you go to the opportunity shop make sure you take a list. It can be as technology rich (or poor) as you want. The important thing is that you use a system that makes better use of scarce resources and reduces the number of SODs you see if the run of a week.