This kind of strategic decision making is one of the top skills innovators must master.
Here's how I make the decision without letting my pride take over:
- Data-Driven Decisions
I insist that every project measure what I call Pivot Indicators. These are pre-defined metrics
that answer two important questions: "When will we know if it's not working?" and "How will
we know?" By establishing these indicators upfront, we remove ambiguity from the evaluation
process.
Whether it's a certain threshold of user engagement, a predefined ROI, or customer satisfaction
scores, these indicators act as the guardians of our resources, ensuring that we stay agil
respond promptly to feedback, and invest in avenues that truly resonate with our overarching
goals.
- The Passion Parameter
Numbers are vital, but they're not everything. The intangible yet palpable energy of passion is
often the difference between projects that fizzle out and those that thrive. If you had to make
the decision today to start this idea from scratch, would you do it?
Are you still as excited about the opportunity as you were when everything kicked off? If your
team exudes excitement and genuine belief in the project, this collective energy can transform
challenges into opportunities.
- Opportunity Costs and the Big Picture
Every resource committed to one initiative means potential neglect for another. It's essential to
ask: What could these resources achieve elsewhere? I actually sit down and make a list of
where I would invest the resources if I had more time and effort. Then, I'm not deciding
whether I failed at something or didn't, I'm just deciding between option A or B for my time and
resources.
I'd like to add that one way I make this decision easy on myself, is I avoid it altogether by
employing a stage gate process for evaluating where I invest my time and resources.
The stage-gate process divides the development of a new initiative into stages separated by
gates. At each gate, the ongoing viability of the initiative is evaluated based on predetermined
criteria:
- Sleep on it: I force myself a 48 hour waiting period before doing anything about a
new exciting idea to see if I'm just as passionate in a few days or if something exciting
has captured my attention. - Feasibility Study: I examine the idea in-depth. What's the potential? What resources
will be required? Do I have the time and energy to invest, or will it take away from
current projects I'm trying to finish? - Testing Phase: If the idea passes the feasibility gate, I'll assign a small amount of
resources to conduct a test. Can I sell this idea? How much work does it take to execute
on it? Do I enjoy doing that work? I outline my riskiest assumptions and conduct
experiments to test the most challenging ones. - Viability Phase: I give myself a challenge: If I can accomplish ___ within ___, then
it's worth the next phase of investment. Yes, this is also a test, but it's an ambitious
challenge that involves dollars collected or something else of high value. - Launch/Scale or Re-evaluate: If the initiative passes the viability phase, it's time to
invest in a launch. If not, I'll revisit the previous stages or consider pausing or stopping
the initiative.
Our resources—whether time, talent, or capital—are finite, and successful innovators
understand that we have to continuously reassess to make sure that we don't get stuck.
