Establishing the Right Promise
Establishing the right promise is a delicate art. Promise too much and you will fall short, ruining your reputation; promise too little and it won’t justify the investment. Many companies find a sort of compromise, promising the bare minimum to get investment and then arguing for the project based on “strategic” reasons. For example, one might argue that the first project is a stepping stone to other opportunities, or gets us a toehold in a major market, or perhaps that the promise represents a value we want to promote. “Under promise and over deliver” is the usual mantra.
Then a huge amount of effort goes into scrutinizing and tracking the details of the promise. The spreadsheet that models the promise often calculates it to an absurd level of precision: who cares about the third decimal place on third year sales? Requiring this precision forces your staff to amass a large amount of evidence to support the promised case, which creates lots of work and documentation.
We have a habit of treating the spreadsheet promise as if it were real, as if managing to the spreadsheet is managing the company and making good decisions. The dangerous part of this habit is that sometimes we take the promise so seriously it become a self-fulfilling prophesy, and we get merely the results promised, that is, the minimum promise we could get away with to support the funding. Rarely is this the full value of the opportunity.
Some projects do in fact over-deliver on their small promises, and we celebrate the achievement. This small success validates the method and makes us feel good about the whole process. But it is a consolation prize, masking a massive opportunity that has been lost.
This unintended mediocrity created by a minimum promise is a very big deal. It can commonly reduce the opportunity by a factor of four or five.