Creating Optionality: A Framework for Achieving Goals

Ever been in a situation where executives challenge you to keep operating expenses at the same level the following year, even though customer transaction volume will increase? Or been given the task to improve client turnaround time without increasing headcount? I have seen too many situations where the leader picks one initiative, puts all the chips into it, and banks on the initiative’s success to achieve the goal. The key is to do the opposite.

Just like how you wouldn’t invest all your capital into one stock for long-term growth, rather you will create a diversified portfolio to reduce risk and still achieve targeted long-term growth. This logic needs to be applied in this scenario. Reduce risk by spreading your chips across multiple initiatives with varying outcomes, create multiple roads to success. Here is my framework of creating optionality:

1. Work backward. What is the target date of achieving the goal?

2. How much capacity do I need to create to deliver the goal? This is the incremental FTEs that need to be created through the initiative. For example, to achieve the same service level but volume is increasing by 30%, then most likely I will need to achieve 30% increasing capacity or FTEs from the current point.

3. What are the ways to achieve this 30% increase in capacity? (Volume Reduction, AHT Improvement, Shrinkage Improvement, Improved Scheduling Efficiency, Reduce Attrition Rate, and reduce ramp-up time, etc.)

4. What is the probability of success across each of these initiatives and the effort required to achieve success?

5. Spread your finite resources across these initiatives. Be realistic; you probably can’t spread it across all the initiatives, and most likely these initiatives won't be achieved by the target date.

6. What are the keys to success and risks for failure for each of the initiatives?

Congratulations, you have built your options for success. One idea that I didn’t mention yet is that this framework will allow you to robustly determine the overall chance of success. If you see multiple ways to get to the target goal, proceed with the execution plan. However, if you don’t see a roadmap to get to the target goal, this is where you speak with executives about your analysis to buy you more time, some resources, reduce expectations, or a combination of all three. It's important to speak up, most executives will appreciate the thorough analysis, outlining the barriers to success and requirements for success. Good luck!