My colleague Somik Raha recently presented “Bringing Agility to Business Development” (PDMA webcast 14 June) where he showed how lessons learned from agile software development could be successfully applied to business development processes. Agile Business Development (ABD) benefits include saving time and money; enabling rapid updating and evaluation of projects; fostering iteration and collaboration; and delivering higher value.
During the webcast, participants submitted dozens of questions. I’ve selected several, which I believe to be of general interest around the topic.
ABD includes evaluation of the economic drivers and dealing with uncertainties around these drivers to determine where to apply resources to focus on achieving the best possible value. Developing ranges of uncertainty around each factor in a business case, for instance, involves assessing values that lie within a plausible range (low-med-high).
In regard to assessing probability, one participant asked if “different members of the team should get different weights for their probability ‘vote’”. The answer: this is not a voting process nor is it a scoring-rules process. You are trying to determine low and high points based on the combined knowledge of participants in the evaluation process, bringing to the table as much as you can based on experience, research (such as market research), and expert opinion. At the low end, it is a good practice to challenge assessments by asking, “What is the lowest possible value such that there is less than a 10% chance the value could be lower than ‘x’.” Put another way, “What is the number that is so low that makes you wobble on your chair? If it were any lower, you’d fall off your chair due to the number losing all credibility.” Similarly, at the high end, the question would be, “Think of circumstances such that there is less than a 10% chance the value could be higher than ‘x’.” This should be as collaborative as possible, with as much collective input as practical. It is important to remember that the assessment of each variable (factor) reflects the best judgment of your team at a given moment in time. As you gain additional knowledge and learn, the model should be updated.
Another participant asked, “We are a small company that is trying to innovate but where do we get the data needed for all these decisions?” Good question. In many cases, even with the largest of companies with lots of resources, data is not available, particularly if you are looking forward to a future clouded with lots of uncertainty, which you probably are if you are being truly innovative. Moreover, organizations routinely underestimate the wealth of information in their internal staff by assuming data can only be found outside the organization. By following a disciplined evaluation process, you will be able to take advantage of the information that already exists within the organization and identify the holes that need to be filled, some of which may require external data gathering. At a minimum, you will encourage better discussion around critical issues, helping you make more informed decisions. In many cases, this discussion can be as valuable to your decision making as data. (One further comment: there is no data about the future and making projections based on historic data, particularly where innovation is involved, can be foolhardy.)
A final question: “How can large companies use this method if other teams (competing for development dollars) are not?” I would suggest that the team that uses ABD will have a unique advantage in getting their projects funded in that they can present a more robust and thoughtful case than other teams. In our experience, teams that use ABD are trusted to make truthful cases, and their asking amounts are also less likely to be slashed on account of higher credibility. We have found that once a given team achieves success, other teams will buy into the process to level the playing field, expanding the use of the ABD decision-making process to other areas in the company; basically a win-win for the organization as a whole.
If you missed the webcast, or would like to review the webcast, click here to see a replay.