First, let’s take a look at Consultants R Us’ completely dysfunctional opportunity assessment plan:
Consultants R Us has no common opportunity qualification screening criteria to determine whether an opportunity is actually worth pursuing. They pursue any and all opportunities most likely because the entrepreneurs who came before them made their livelihood as rainmakers without many rules about where to focus their efforts.
Qualifying an opportunity is viewed as being a one time event – at the beginning of the pursuit. That’s only a reasonable strategy if you also agree that a poker player in a seven card stud hand should only decide once – when he sees the first three of the seven cards he will be dealt – whether or not to proceed with the betting from then on. If you like this philosophy, let’s play cards!
They also completely underestimate the true business development cost in chasing new opportunities. They measure only actual payroll and “hard” costs, overlooking the importance of accounting for “opportunity cost” (equivalent billable revenue for these resources).
How can Consultants R Us become more strategic and profitable as they implement their opportunity assessment process?
- First they should establish well-tested, well-documented, and well-understood criteria for opportunity qualification that gives them permission to say “no”. Doing so shifts the go/no-go decision from an emotional thought process to an objective decision process and is likely to save them thousands of wasted business development hours and dollars.
- They must begin qualifying opportunities continuously! Think stud poker – a good card player always asks a simple question every time he considers the price of buying another card (or proceeding in a pursuit) – “Can I win?” If you can’t, deploy your finite resources elsewhere!
- Planning and measuring their business development resources should be based on the opportunity cost, not just the payroll and hard costs. This allows them to become more realistic and discerning about how and where to deploy their valuable people.
- It is crucial that they stop treating the universe of opportunities in their pipeline equally. If you maximize your “Return on Time Invested” you will ensure that the best resources are extraordinarily deployed to the best opportunities at the expense of the long shots.