October 22, 2017

Mistake #9 – Trying To Be Too Many Things For Too Many People

All companies have limited resources and must make decisions of where best to apply those resources.   But way too often I see companies from start-up to large trying to spread those limited resources across too many opportunities because they are trying to be too many things for too many people and are unwilling to say no to some of the opportunities.

Some typical scenarios can include:

  • A new opportunity was presented to the CEO by a senior executive at another company.   The CEO was convinced on the idea and started to dedicate resources to the new opportunity without ever validating that it made sense to invest in it.
  • A start-up sees so many opportunities for their new product and they try to invest resources in all of them because they are afraid of saying no to the wrong opportunity.
  • All new opportunities are treated equally and thus resources are spread across each opportunity, without committing the right resources to any of the them.
  • A sales person presents a new potential market segment for a current product and starts to pursue that without getting any approval from the organization on their ability to support it.

These scenarios how examples of where no one was willing to say no to potentially good opportunities so that the organization could more appropriately focus on the best opportunities.

How Does a Company Focus Their Resources On the Right Opportunities?

Clearly Defined Business Strategy

The starting point for making these decisions is having a clearly defined business strategy to guide these decisions.   These decisions can include:

  1. What markets your company will serve
  2. How you serve these markets
  3. What are your core competencies
  4. How do you create a competitive advantage
  5. How is your company positioned in the market
  6. What is your brand promise

Based upon a clear definition in these areas, the first step of saying no is validating that the opportunity aligns with the business strategy.

I understand that in the start-up world, sometimes you are still trying to discover the right strategy, but you should always at least have a hypothesis of what you think your strategy is, based upon evidence and analysis, and then test and refine that as you learn.   Having at least a hypothesis on your strategy will still help focus your efforts.

Prioritization Strategy

Even if an opportunity aligns with your business strategy, you still might want to say no because there are other opportunities that deserve more investment.   When you are in a start-up mode, this decision is going to be about which market is your initial target market and how does this decision drive you toward defining your minimum viable product (MVP).  Points that you should consider and rate for prioritization could include:

  • How big is market segment
  • How big is the problem to them (are they willing to pay to solve it)
  • How much is the market (segment) growing
  • Is there an easily identifiable group of early adopters
  • Can they be reached
  • Can you develop a reference-able ecosystem
  • How strong is the current competition
  • Can you create a strong competitive advantage
  • Does the opportunity create synergies with current products or markets
  • What is the technical risk
  • What is the size of the required investment to pursue the opportunity
  • What is the potential return on that investment
  • How well does it support strategic initiatives in the organization

Depending on how complex you want to make this, you can choose the criteria that are most applicable to your situation, possibly weight each criteria and then rank each opportunity on a scale of 1 to 5 relative to each criteria.   That’ll give you a reasonably objective (and somewhat subjective) perspective on which opportunities make the most sense to pursue.   Once you select the best opportunity (or opportunities), you want to fund them adequately to make sure they have a chance for success.

Business Case Process

A business case helps you evaluate and analyze the details of a potential market opportunity, helping you make a well informed decision about the potential market opportunity.   Having some process ensures that the analysis work is doing for each opportunity and each opportunity gets the right scrutiny from the right decision makers in the organization and it reduces the chances of a rogue opportunity occurring.  In a start-up environment, you won’t want to create process, but you still need to do the analysis work to help you make well informed decisions about which opportunities or market segments to pursue.

Summary

By applying these three concepts, your organization will do a much better job of saying no to the good so that you can focus for success on the best.

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