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Wednesday, September 23, 2009
Born in the Recession
Three steps to add investment with fewer resources
MHT's Doug Banks: 10 Women to Watch in tech
Flash Slideshow: Mass High Tech All-Stars Thought Leadership Roundtable
The British saying is “in for a penny, in for a pound.” The background of the saying is from nonpayment of loans, which could be another discussion in this economy, but what it means today is that once you’ve started something, you should finish it — even if the costs and risks increase. To be clear, I am not advocating betting the farm to make a project successful. I am advocating that you take a hard look at all of your projects and see how many are “penny” projects and whether they should be “pounds” instead. The goal is to decrease your overall number of projects, so you can increase your investments in those you keep.
First, it is important to know why we end up spreading ourselves across many projects, rather than focusing our energy and resources on a few. Whether times are good or bad, the tendency is to be optimistic with our most precious resource: time. We dramatically underestimate what it will take to complete a project. We take on more than we can do; it takes a great deal of effort to actually do less.
Next, layer on a natural risk aversion, where we want to hedge our bets as to what may work and what may not. One example: How hard would it be in your company to say, “Let’s double down on our resources for France by taking resources from our efforts in the U.K.?” We naturally want success for both countries. What if we’ve chosen the wrong one? Throw in a bit of comfort in doing what we did in the past and fear that not doing that would mean the loss of what we have already “guaranteed.” This can be as simple as deciding to do the same events as last year without stepping back to see what you have added to your plate this year. We often keep doing things that we did in the past, while continuing to add new initiatives.
Finally, the current economic situation makes resources more scarce. This makes “pounds” become “pennies” overnight. Then, out of your mouth comes the guaranteed-to-inspire-eye-rolling phrase, “It is time for us to focus and do more with less.”
See how easy it is to slip into penny projects? We do it by nature, and we do it by necessity. My advice, escape these norms and cycles with a three-step process:
• Perform a project inventory. For this, go with the “everything’s a project” mentality. Don’t forget to include in your list all regular, reoccurring, business-as-usual projects/processes. Really get a list together that outlines what you and your teams do each day.
• Make some hard decisions. Explain to your team that they are juggling five balls now and you want them to cut that down to two. Really two. Force them to cut three-fifths of their projects. However they want to do it, have them come to you with a proposal and a rationale for what they would choose and how to ensure the success of those projects.
• Review the cut list. After understanding what can be done for the selected two-fifths, consider the consequences of the cut projects. How could you survive without that revenue or that service to your customers? What would you do in that situation? This will help you be creative about what you can cut.
Most important is that you have to take this exercise seriously. Do what you can to get yourself and your team to believe that you really would cut three out of every five of your projects. This is how you can achieve the rethinking that your business likely needs during these challenging times. In the end, maybe you cut 20 percent of your projects rather than 60 percent, but I can guarantee, if you take this seriously, they will be a different 20 percent than if you approached the exercise to cut only 20 percent. The key is forcing yourself to think differently, which will inspire new ideas. It will help you make the decisions to turn your penny projects into pound projects — and come out ahead.
Jana Eggers is a regular contributor to Mass High Tech. An MHT “Woman to Watch” in 2004, Eggers is CEO of Spreadshirt.com and blogs at www.lifeonashirt.com.
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