Monthly Archives: December 2013

How are we doing? Shall we continue?

In many situations we need to make decisions which affect our future.  Are we doing the right thing?  Is what we are doing effective, really effective or do we just want to believe it is?  Believing it is would be good for our ego, wouldn’t it?  But would it be truly beneficial?

We all have to make decisions.  Snap decisions are rarely good decisions, especially if they have major consequences.

One way to reduce the ‘knee-jerk’ stuff is to think ahead carefully.  If we’re trying a new venture it’s useful at the beginning to think what ‘good’ might look like.  Equally important is to know what ‘bad’ might look like.  Don’t think of these as targets.  Think in terms of a safety net.

Knowing in advance what bad might look like means that we can easily spot if we are failing.  If we have to decide what our tolerance to bad is when we’re under pressure to give an answer immediately it can be difficult as no-one likes to admit they got it wrong.  If you’re deciding on the spot and it’s your pet project it’s easy to attempt justification by describing a bad outcome as acceptable.

Where groups of people are involved agreeing at the outset on the criteria means that everyone knows what good and bad look like.  Everyone can see whether the experience is a success and should be continued, or a failure and stopped.

What are they?

Each criterion is usually expressed as one or two sentences, followed by an indication of size.  Each then needs to be classified for its importance.  So for example some may be critical whilst others are merely desirable.  The failure of a critical criterion may trigger certain actions, such as stopping the experiment completely.

Why success criteria?

  • Helps prevent irrational decisions being made in the heat of the moment
  • Helps provide rigour in the decision making process
  • Helps gain consensus
  • Avoids the dangers of anecdotal evidence
  • Helps go/no go decision making

 

Example

David, an engineer is made redundant and decides he’ll take the opportunity to follow his dream and passion to own a golf shop.  David enjoys golf but for the last 8 years has only played about 5 times per year.  David recognises that whilst he is enthusiastic about having his own business he has several short comings including a lack of retail experience and his golfing knowledge could be stronger. He realises there is a risk because he has to provide an income for his family, however he reasons that he could survive on a modest income and his savings for a couple of years.  It’s a now or never decision.

David finds suitable premises and plans to launch his shop.  A friend suggests that he should track his progress to determine whether his dream is working or if at some stage he needs to sell the shop and attempt to return to regular employment.  He and his friend prepare a list of things to monitor and how to use these to decide whether to continue.

Here’s an extract from the list:

Income

David really hopes his shop provides him with an income of £20kpa. However the economy has been tough and because it will be a new shop and his lack of business knowledge it may take a long time to get to this level.  He reasons that he must make at least £5k in the first year, any less and he would need to close the shop.

Marketing

The shop needs customers.  Ideally he needs a steady flow of new customers and for these same customers to return, giving him repeat business and a solid customer base.  Ideally he needs golfers to come from the local club.  He plans to monitor this.  Over the first 6 months if 100 club members visit the shop he’ll think this is satisfactory, more would be great, but less would indicate he needs to change the way he markets his business

Credibility and Knowledge

David is concerned that he may have difficulty convincing seasoned golfers when they ask for advice on purchases.  He decides to keep a check on the ratio of experienced golfers who ask for product advice and whether or not the make a purchase from him.  David thinks a one in six ratio be OK but any less would indicate a lack of credibility

.

Measure Success Criteria Relevance
Income £5k pa or more Essential – Close the shop if less and get a job
Marketing 100 club members in first 6 months  Desirable
Credibility and Knowledge 1 in 6 sales ratio Essential  – Close the shop if less

After a year David assesses his performance against the list and determines he has fulfilled all the criteria and continues living his dream.