Companies that bite off more than they can chew will suffer from severe indigestion

Most companies go through the planning process to evaluate new undertakings to improve the business — either products, systems or physical expansion. Typically, every suggestion has a sponsor who believes the effort will produce results that will far exceed the toil and costs, and may provide a trajectory for exponential growth and new opportunities. With certain new undertakings, there isn’t an alternative. Examples include modernizing technology, which are must-dos to remain competitive; or product enhancements, sometimes not to increase revenue, but just to avoid losing future market share because the previously successful product has not kept pace with the advantages offered by others.

The cost and work involved in staying competitive and staying in the game is mandatory. If it causes a little indigestion, companies just have to deal with it even though it may mean putting other projects on the back burner either temporarily or for the longer term.

The majority of decisions to go, no go, or stop are based on economics and available resources including cash and/or people with the needed skills to plan and deliver the expected results.

It all gets down to a matter of priorities; before a company can grow, it must first be able to survive. If a company has ample cash and talent, it can endure and continue to function as planned even if there are flaws in launching the envisioned latest and greatest. A key component of making projections is for businesses to create three outcomes including (1) most likely, (2) worst, and (3) best-case. Always remember, “a business’s extreme fears and fondest expectations rarely become a reality.” This means when predicting results without the benefit of any history, it is usually best to utilize a conservative “most likely” or even a bit lower performance estimate.

If the undertaking, as it unfolds, is proceeding better than expected, additional resources can be dedicated to accelerating the process to reap the benefits without incremental costs, which also improves margins.

An extremely dangerous decision for a company can be to put itself in an all-or-nothing position which translates into either a homerun or a strikeout. This is a reckless strategy and runs the risk that the company might not be around to fight another day if things go sour.

I’m a big believer in the philosophy of nothing ventured, nothing gained, but it can be irresponsible to bet on pure luck and the rolling of the dice.

When goals are not reaching benchmarks, the most prudent move could be to call a timeout and regroup. Stopping forward motion provides an opportunity to pause and find fixes without perpetuating yet undiscovered glitches.

If the probability of success continues dwindling, one of the best decisions can be to swallow hard and pull the plug on the new project.

In new launches, there are usually obstacles and detours that delay reaching the destination. The most important consideration is that there is ample time and oversight to evaluate all aspects of the effort and ensure the company hasn’t overloaded its plate, causing critical warning signs to go unrecognized because the company just had too many balls in the air.

Indigestion usually is not fatal as long as you don’t choke to death on what you’re chewing. ●

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Michael Feuer

Founder and CEO