Fail Early, Fail Cheaply: 4 Steps to Vetting New Opportunities for Your Organization
Because the social sector is in the business of changing the world, we often have an inclination to see every need or idea as a call to jump into action. The result of taking on too many opportunities comes in the form of mission creep, donor confusion or staff burnout. Research indicates that poor planning is at the root of most of these failures. No one likes to fail, but starting a program or social enterprise has inherent risk. In the office, we often encourage each other and clients to take risks, but to mitigate the risk by “failing early and failing cheaply.” So, how is this possible with a new program opportunity? To do this intentionally, we encourage the use of opportunity assessments to help make a GO or NO GO decision. As I often say — every idea is a good idea, but not every idea is viable.
A quick opportunity assessment analyzes the viability of an opportunity — does the idea warrant further investment of time, effort and resources? It often uses internal analysis to evaluate the opportunity and it should be relatively inexpensive. If you determine the opportunity to be impractical, you haven’t invested much. If you determine the opportunity has a high likelihood of success, you have a solid starting point for a more detailed feasibility assessment, business plan or grant.
Here is the four-step process we recommend:
- Select Opportunity: Decide which opportunity(ies) you intend to evaluate. Sometimes it is helpful to evaluate more than one, so it is a relative assessment of which opportunity is the best one.
- Establish Decision Criteria: Before you move forward with any additional steps, how will you decide? What factors are important? We have included a sample template as a starting point.
- Assess Internal Capabilities: Review your vision/mission and use your strategic plan as a guide to decide whether an opportunity is right for your organization. It might also be important to assess the external landscape to determine if you are the right organization to take on a new opportunity or if partners might be helpful.
- Analyze and Rate Criteria: Since you have the criteria established upfront, the analysis becomes simple. You just apply what you learned and know to the pre-established criteria. To make this even easier and more objective, we recommend adding a rating system on each decision criteria — Low to High or 1 to 3. It allows you (and others) to assign each decision criterion a score enabling you to determine a final value for each opportunity. This process should give you an objective idea of whether the idea has enough viability for additional steps.
For possible decision criteria, our favorites are:
Ease of Operations
- Internal Expertise & Capacity: What resources are needed and how hard are they to get and keep?
- Operational Complexity: How easy will the opportunity be to launch — for us and for others?
- Synergy: Does this complement our existing work?
Impact
- Fit with Mission: Is this opportunity aligned with mission?
- Impact on Constituents & Community: Does this opportunity add real value for the community? Does it positively impact our constituents? Are there easier paths to work together with someone else?
Return on Investment
- Start-up & Operating Costs: How much will it cost to start? How much will it cost to operate?
- Market Demand: How large is the potential client/customer base? How favorable are the trends in the market?
- Expected Revenue: What are the possible sources of revenue? Are there diverse sources of revenue?
New ideas or opportunities are all around us. The most successful organizations have an intentional process for vetting a new idea or program. Then, when you do pursue them, you can put all your energy behind them to ensure they have the best chance of success. If you have other ways your organization reviews new ideas or opportunities, we would love for you to share them with us.
