Here is an excerpt from an article written by Doug Andrew for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.
Photo by Cris Dinoto
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How do you evaluate a business opportunity? The world is replete with SWOT mechanisms for evaluating a prospective new product offering, as well as with opportunity assessment templates for evaluating a project against overall business goals, customer impact, strategic potential, and competitive urgency. These instruments play a vital role in acquisitions, new products and features, and even the new divisions of business you’d like to deploy.
But how do you evaluate the myriad smaller opportunities you come across every day? Should you speak at that event? Author a book? Attend a strategy summit?
Some years ago, I learned a fast and effective way to evaluate day-to-day opportunities from Dan Sullivan, the cofounder of Strategic Coach, which I have refined even further for myself. I have taught it to my teams and assistants as well, as a way for them to evaluate in advance whether an opportunity is worth recommending to me.
For leaders and organizations who have more capabilities than opportunities, the challenge is scouting enough of the right opportunities to fill their plate in an optimized way. For them, this instrument becomes an opportunity optimizer to evaluate and select the highest-ranking initiatives to pursue.
But many leaders and teams are blessed with far more opportunities than they can possibly seize. For them, this system becomes an opportunity filter to evaluate the most-optimal uses of your time and resources. Ultimately, as I have become skilled in using this metric, it has become a calculation that I can do in my head.
When you find an opportunity, or as you seek a new one to pursue, ask how it ranks according to five critical factors. Rank each item from -1 to +5 and tally your score. (Note: Starting with -1 highlights that some aspects of a project are actually a net negative — such as speaking to the wrong audience or the wrong industry.) There are five critical factors.
[Here is the first.]
1. Ability. Will this opportunity utilize your unique talents and abilities? For a company or team decision, does the opportunity highlight your greatest differentiation to customers? For you personally, does it showcase your greatest and best personal skills? In my case, making complex ideas simple is a skill that I have honed and that I enjoy to such a degree that if the answer is yes, I would rank this a 4 or a 5.
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Here is a direct link to the complete article.