Imagine your own failure
It’s amazingly useful to imagine your own failure. I invited 3 trusted advisers round for dinner tonight to show them my business plan for X or Y, and for them to imagine that we were a year in the future and my business had failed. Why would it have failed? This technique is called a Pre mortem and is increasingly being used by companies focused on the quality of their decision making.
My three dinner companions – a lawyer, small business owner, and L&D manager – came up with the following key ideas. _________________________________________________________________________
The small business can fail due to spending time on the wrong things, the ones that are interesting and time consuming but not revenue generating.
It can fail by not clearly explaining to prospects – in plain language – what the business does, what the benefit is and why they should believe in you.
Picking the wrong clients or not having access to the right clients.
Relying too much on the Founder, not being able to automate tasks, overstretching too early.
Legal issues – for example contractual, intellectual property ownership.
Discounting too much & not being able to collect money in time.
Not “pivoting” – throwing good money after bad and not reacting to data showing you should change tack.
By conducting it as a pre-mortem, rather than just feedback on my business plan, the range of ideas was much broader. Research on the pre-mortem technique has shown a 30% increase in ability to correctly identify reasons for failure.
I will be using the ideas above to feed into my operational plan for X or Y, and it’s a technique I frequently recommend to clients looking to reduce risk and maximize opportunities.
Posted by Rob Pyne