I was re-reading David and Jim Matheson’s best-selling Harvard Business School Press book, “The Smart Organization: Creating Value through Strategic R&D” and came across this great story provided by Dr. Arno Penzias a former chief scientist at AT&T Bell Laboratories and Nobel Prize-winner.
“Scientists ask me, ‘How do you know you’re working on a good project?’ I say ‘Simple: imagine that what you’re going to do will be 100 percent successful; find out how much money it’s going to be worth; multiply by the probability of success; divide by the cost; and look at the figure of merit.’ When I originally said this, everybody became hysterical. Everybody got mad, saying, ‘How would we know the probability? How would we know what it’s worth? What if we don’t know who the customer is?’
“But if you don’t know who needs something, why are you doing it? If you don’t know what the chances are of success, why are you doing it? If you don’t know how much it’s going to cost—not just in resources but in years of your life—why are you doing it? You ought to know all three things!”
How good are you at answering these questions?