By Alex Shootman | CEO at Workfront
Note: This post pulls from Done Right, a leadership book from Workfront CEO Alex Shootman.
Let me tell you a cautionary tale about a great business that embarked on bold plans only to see them fail. After all, the best type of mistake to learn from is someone else’s.
Back in 1999, the successful fashion and lifestyle magazine Cosmopolitan made the leap from the news stand to the dairy counter with the launch of a branded range of yogurts, fromage frais, and soft cheeses.
You can see the strategy: If folks are reading stories about indulgent ingredients in the pages of our magazine, why not sell those products too? And, after all, another magazine from the same stable, Good Housekeeping, had made a success of selling branded kitchenware.
But those yogurts and cheeses went bad … fast. On crowded supermarket shelves, cheaper and better-known food brands made for tough competition. Within 18 months, the Cosmo-branded dairy products were withdrawn from sale.
There are two lessons from this story of rapid market entry and exit. The first is that if things are going wrong, a good decision is to change course. Cosmopolitan waited just long enough to see if the product would fly before leaving the dairy market.
The other lesson is how to spot a plan that’s more than likely to fail. Your first step is to understand the different species of business goal.
Extraordinary Goals Versus Pipe Dreams
I believe there are four types of business goals:
- Pipe dreams
A clear goal is when you ask your team to hit a familiar target by working in a familiar way, while a stretch goal is when you ask your team to hit an unfamiliar target by evolving the usual way of working. That might be getting more done than usual — and done faster, for example.
These first two types of goals are more or less about keeping the status quo.
The third type of business goal, however, demands a fundamentally different approach from your team to be attainable. This is an extraordinary goal. No doubt that’s what the team at Cosmopolitan was hoping to hit with their bold diversification into dairy.
The final type is the pipe dream. That’s where no one who really knows the business believes the goal is achievable — even by inventing new ways of working. Most commonly, these play out as either unattainable growth fantasies or unachievable savings scenarios — if we do this, we’ll conquer a new market or save millions. For any business leader, these are tempting objectives.
Where things go wrong is the confusion of the extraordinary and the pipe dream. And there’s a simple stress test that will help you distinguish between the two.
How Did That Happen?
Sometimes a good idea is a borrowed one that’s just applied in a different way to the original. So, the stress test I use to distinguish between an extraordinary goal and pipe dream was inspired by the work of Roger Connors and Tom Smith in their best-selling business book How did that Happen? Connors and Smith suggested asking senior team members to score on a scale of 1 to 10 their level of agreement with whatever you’re planning to do. That will give you a snapshot of their overall confidence.
Here are four questions that to ask your team to score on the 1-10 scale before embarking on an audacious course of action:
- Is it clear? Is the task or project well-defined?
- Is it achievable? What’s the confidence level in getting this done?
- Is it needed? Is this task or project necessary?
- Is it linked? Does it fit with the wider strategic priorities of the business?
If you’re averaging scores across the team of below five out of 10, you’re talking about a pipe dream. As seductive the idea sounds, no one’s really buying it.
Averaging six to eight? There’s more or less merit to the idea, but there are problems with it that need to be considered before taking the first steps. You need to drill down into the scores against the four questions to pinpoint the source of the team’s concerns. That will tell you what needs to be fixed with the plan before getting under way.
Think an average of eight is good enough? If it’s a truly audacious objective, you need 90%+ confidence across these four basic questions. You’ll then know everyone believes we know what it is, we can do it, and we should do it. I wonder how the team at Cosmopolitan would have scored the dairy project on those four questions before launch.
Bravo to the Bold and Wise
I say bravo to businesses that try bold things and face the risk of failure. Extraordinary goals, by definition, challenge teams to think and act differently. But better still, be bold and be wise. Take time — even a quick stress test — to understand the proposed goal and whether it truly deserves a place in your business strategy. Otherwise, like all pipe dreams, you’ll see those well-intentioned plans go up in smoke.
Read more about Done Right.
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