But What’s Best for Us?
We recently asked Epicomm State of the Industry participants about their biggest opportunities for profitable growth. You may be surprised, in light of all the negativity about our industry, by the consensus: There’s plenty of opportunity. Our challenge is figuring out which are most promising given our specific circumstances, resources, and goals.
These three steps can help us decide:
Step 1: Establish criteria for evaluating the opportunities. We’d certainly want to include the following:
- Cost. Not just of equipment, hardware, and software, but all the major costs, such as consulting/advisory services, the project will require.
- Risk of taking the action. Maybe it’s very different from our core business or requires a big financial commitment just to get started.
- Risk of not taking the action. Will passing put us at competitive disadvantage?
- Skills required. Do we have them in-house? Can we train current staff? Or will we have to hire? If we have to hire, do we have any experience recruiting and retaining the skills we’ll need?
- Ease. How easy will this project be to complete? Is it something we already do? Or is it likely to be a major distraction?
- Expected profitability. Is it likely to be significant, moderate, or limited? Why? And how long before we can expect to realize a profit?
Step 2: Create a table with the criteria across the top and the opportunities down the left-hand column.
Step 3: Score each opportunity. We can score on a scale of 1 to 5 , 7, or 10. But that can be ambiguous because one person’s 4 will be another person’s 5. Here’s an alternative:
- Add one point for each positive aspect of an option (low cost, low risk, easy to implement, etc.)
- Deduct one point for each negative aspect (high cost, high risk, difficult to implement, etc.)
- Double the scores for expected profitability—e.g., assign two points to the alternatives likely to increase profitability the most and deduct two points from alternatives likely to increase profitability the least. Why double the profitability scores? So we don’t end up favoring a bunch of safe options that are low cost, low risk, easy to implement, etc. but do very little for our bottom line.
Include everyone familiar with the opportunities being evaluated in the discussion, regardless of job title. Welcome the contrary opinion: Contrarians may slow the process. But they may also see something everyone else is missing. And keep refining: Scoring can always be made more precise; ranking criteria can always be defined more completely.
This will all take time and thought. But it greatly increases our chances of identifying the opportunities that are best for us. And in our shrinking-margin for error business, where both the return to making the right decisions and the cost of making the wrong ones are greater than ever, that’s a game changer.