The old adage about real estate is that the three most important things are "Location, Location, Location."
Well, when it comes down to business in general, the adage morphs into "Decisions, Decisions, Decisions." That's why the men and women on top of the corporate food chain (or the public one, for that matter) are paid the big bucks; they make decisions that can change lives, the future, the stock market, the environment, not to mention countless careers...most notably their own.
At Just For Laughs, I have to make dozens of decisions every week, on things as mundane as the wording of a TV show voiceover to as game-changing as where to invest this year's R&D budget.
Over and above all this management of the day-to-day are the new offers. Never mind the email spam or the telemarketing (of which there is an overabundance), but at least once a day--each and every day, including weekends--I receive some sort of legitimate business offer. Phone calls, written presentations, PowerPoints, chance encounters, referrals from friends, being cornered at Christmas parties...these offers come in all shapes, sizes, forms, formats and speeds. Frankly, I could do nothing else all year other than absorb and size up these offers, and it would be more than a full-time job.
Until recently, we had no set procedure to evaluate this deluge of pitches, projects and promises. Each one was given a little bit of love, and in trying to be open-minded with our thought process, most ended up being given way more consideration than they deserved.
Now I know this sounds a tad elitist, but stay with me. There is no constitution chez nous that states that all projects must be treated equally. This is not to devalue the projects; new ideas are the lifeblood of a company. But sometimes, as good as they may be, they're not for us. And other times, well...they suck badly.
So what we did to save time--well, perhaps to more efficiently use our time--was develop a simple Offer Evaluation Tool, an askew four-square grid designed to properly place each proposal into one of four boxes of what we need as a company going forward.
The reason I used the qualifier "askew" is that this isn't a standard, straight-line grid that cuts in four equal parts. The Just For Laughs grid is weighted, with slanting lines creating tilted quadrilaterals of differing sizes and ensuing importance. They are:
RECURRING REVENUE (45% weight)
Recurring revenue is the oxygen of any business. The more it flows, the easier and longer you breathe. This is a valuable lesson I learned at Airborne Mobile. While we were building our company with prestigious work-for-hire contracts for blue-chippers the likes of Disney, Fox, Maxim, the NFL and HBO, we were only as good as our last deliverable. Once we entered into long-term agreements with major wireless carriers, that guaranteed revenue monthly on an ongoing business, THAT's when we became truly valuable in the eyes of the market, our bankers and our ultimate purchaser.
CASH GRAB (35% weight)
Okay, so it doesn't flow, but comes in a sizable chunk. Cash is still valuable. Helps pay the bills, build a war chest and finance other activities. This is NOT to say whore yourself out for money, but there's nothing wrong with delivering a big show or big deal...and then walk away.
RELATIONSHIP BUILDING (15% weight)
Yes, yes...I know that relationships are vital building blocks to most businesses, a la "it ain't what you know, it's who you know." But you know what I know? I know that a lot of relationships are wonderful, but never pay off. I also know that a relationship--no matter how great--won't save a shitty product, a bad deal, poor execution, or any other major corporate stain, more than once. Then it ruins the relationship. So it's not that investing in relationships is bad, but it's like any other investment--there has to be a payoff.
BRAND BUILDING (5% weight)
W-w-what? Only 5%? But what about Apple, or Google, or Mercedes-Benz, or McDonald's, or... Wanna know the truth? The best brand-builder in the world is a successful product or service. One that you can be proud of. One that does something special and/or great. And hopefully makes money. In my book, any project green-lit solely for the purpose of brand-building had better have a map to the land of Recurring Revenue or Cash Grabs...and hopefully, with some short-cuts along the way.
So you know what happens now when we get our next offer? We pull out the Grid. And here's how the conversation goes:
"Recurring Revenue?
"Yes? Welcome home!
"No? Well, is there a nice immediate payoff?
"Yes? Pleased to meet ya!
"No? Hmmm...well, will this build a relationship that will pay off in the near future?
"Yes? Well...okay I guess. Let's move forward.
"No? Uh...does it do something un-effin'-believable for our brand?
"Yes? Alright, tell me what I'm going to have to do. And make it easy.
"No? Next offer!"
Granted, this may not be for everyone, but I think it's starting to work for us at Just For Laughs. It may work for you as well, with adjusted weights or added/subtracted criteria.
But here's what I learned this week--if I don't have a system of simplifying my decisions, I'm not just going to make less of them...I'm also not going to make the most of them.