How should a company evaluate new ideas? That’s a question I pondered a lot in the past. Who hasn’t sat around a board room table with colleagues, listening to a presentation by someone looking for buy-in on their supposed great idea? How then, does a room full of people with different opinions, backgrounds and priorities, make the best decision in a limited amount of time? More often than not, an easy and sensible answer isn’t immediately available, and these words are often uttered, “we’ll get back to you,” which usually means, “we aren’t sold.” Next, a series of discussions and follow-up meetings ensue, taking up time, energy and resources, until a unanimous decision one way or the other is made. Lots of people and plenty of spinning wheels here, folks.
After replaying the above scenario at countless meetings of pitches for new ideas and initiatives, I sat down with our Director of Marketing for a brief “Ideation Session” where we created the framework for a business idea evaluation tool, more commonly known as our current Grading Matrix.
After subsequent discussions with our CEO, CFO and Managing Partner, leadership was bought in to the concept and the Grading Matrix entered the scene. This new measurement tool was created to help streamline our pre-proposal approval process, and has been a catalyst for helping our directors and proposal team decide whether it makes sense to pursue RFPs (Request for Proposals) from a fiscal and strategic perspective.
Before I tell you more about the Matrix, let me explain how our buy-in/approval process worked before we started using this new project evaluation tool.
Before Implementing the Tool
Step 1. A project coordinator finds a relevant RFP in one of our business territories that she thinks is worth pursuing.
Step 2. A series of meetings are scheduled between the proposal team, accounting representatives, sales director and local managers in or near the business territory. Background information, research and project specifics are presented and opinions are shared.
Step 3. Meeting attendees collectively try to decide whether or not the opportunity is worth pursuing, based mostly on gut feel and existing relationships in the area. When an on-the-spot decision cannot be made, follow-up meetings/discussions are scheduled.
*During these meetings, it wasn’t uncommon to look around the room at everyone’s non-verbal cues and tell that the only person who had any energy and excitement around the opportunity, was the person who called the meeting. Yet the meetings almost always concluded with a “yes” decision to pursue the opportunity.
Step 4. Business Development Director meets or speaks with the CEO to discuss the project opportunity and either get buy-in from the CEO to move forward and pursue the RFP or decide to pass on the opportunity.
As you can see from our 4-step process above, there weren’t any tangible variables in place to help guide us in a comprehensive decision-making process. What we realized was that prior to having a Grading Matrix to help determine feasibility of an RFP, we relied more on intuition and “gut feel” rather than measurable, standardized criteria. Before the Matrix, it also wasn’t uncommon for the person with the most knowledge about the RFP to be able to sway the rest of the group, even if it may not have been the best opportunity to go after. As a result, the team set out to create a plan of action that included non-negotiable criteria in pursuit of data-driven information. For RFP analyzation, this meant we needed to strongly consider criteria such as: type of program, bench strength, whether or not the opportunity included a bricks and mortar building, etc. Speaking of criteria, here is an example of some of the categories we use on our Grading Matrix: Excitement Level, Strategic Fit, Strength of Relationship, Applicable Past Experience, Type of Contract, Margins, Organizational Capacity, Type of Investment, Geographic Location and Potential for Expansion.
If your company is looking for a fundamentally different way of vetting opportunities, or a more effective way to garner leadership buy-in, a similar tool just might be the answer for you. The reasons that led to the creation of a Grading Matrix may resonate and inspire you to create one of your own to meet your company’s needs. Maybe there needs to be a meaningful, engaging decision-making process, or a more standardized ranking method for you and your team to use, and I’m here to tell you it will transform your way of making business decisions and getting buy-in. After analyzing our existing process and brainstorming ideas for a standardized, measurable tool to help us better analyze opportunities and ultimately secure buy-in from the final decision maker – our CEO – these were the main takeaways. And as you can see, the Matrix created a streamlined and customized way to capture the most essential information in a succinct way.
Some Takeaways After Implementing the Tool
- By assessing bandwidth and recording the number of opportunities we were pursuing or passing on, based on hard data, we noticed that we were going after a high number of opportunities, but sacrificing quality over quantity.
- To determine whether an opportunity was right for us, we needed to look closer at the opportunities themselves from a more objective perspective while deciding whether or not the opportunity aligned with our company’s vision, painted picture and strategic goals.
- By having a consistent information-gathering tool, we lessened the convoluted/fuzzy information we had been sharing in order to better communicate with the CEO why we were/weren’t going after certain opportunities.
- The Grading Matrix gave us more context to be able to talk through pros and cons of each opportunity.
- In line with our ISO certification, we envisioned this process-driven tool helping us to further standardize a procedure that previously was very loose and undefined.
Our executives feel the biggest benefit of the Grading Matrix is that it takes the emotion out of the equation, because we all know when we’re passionate about something, we sometimes lose sight of the tangible facts and ultimate goal. The Grading Matrix forces our team to focus more on measurable details, which helps us present a more solid, fact-based pitch to the CEO. Once the overall concept was approved, the Matrix was brought to life by designing a layout that made sense for us. Our Matrix consists of 10 categories as well as 3 different columns with corresponding letter grades (A, C and F). To determine what constituted an A, C or an F, we sat down and conducted additional ideation sessions. After the template was created, one of our summer interns helped to develop a useable format and built out formulas in Excel. Later, we also tied it to a database to enhance the Matrix’s functionality, in essence, making us better, smarter, faster.
The Grading Matrix formalized our original, inconsistent process and offered a solid guide to streamline dialogue and measure sensibility and feasibility. Our entire team, who consists of members in nine different states, has found it to be effective in evaluating information against the same parameters every time. This consistency enables us to compare different opportunities on the same scale and gives factual insight into why we did or did not go after certain business opportunities.
During the first year that we implemented the Grading Matrix, our win rate on proposals spiked substantially! In addition to the top line revenue growth, we were able to save a considerable amount of time, align decisions more closely to our strategic vision and glean additional insight which helps us continue to refine the process.
So when buy-in from our CEO is needed in order to pursue a new opportunity, a detailed Grading Matrix successfully captures all the important data to start the framework for a discussion, and usually the result is a pretty straightforward decision. It also doesn’t hurt that our CEO has a great deal of trust and faith in the managers and directors making the recommendation. So, with a Grading Matrix in his hand, all potential questions are answered and buy-in is a no-brainer.
This process has been such a game-changer for us that we wanted to share it with other business professionals like you in hopes that it can be used to make 2018 your best year yet! A sample Grading Matrix template to get you started is shown below. Maybe you can customize it to fit your needs. If you’d like an editable copy, feel free to email me at: firstname.lastname@example.org