Evaluating Proposed Initiatives: 7 Questions

Evaluating Proposed Initiatives: 7 Questions Executives and executive teams should reference these eight essential questions when evaluating a project opportunity, while project champions can use them to craft and present their proposed initiatives.

1. Who has been involved? The answer provides critical insights that often undermine projects: have all the right stakeholders been involved; are they on board and supportive of the project moving forward? Even if an initiative is technically viable and comprehensively assessed, it will go nowhere without support. Failure to consider even one key stakeholder could derail the project.

?2. What assumptions have been made? At the proposal stage, there is a huge amount we don’t know. Assumptions are unavoidable and can be useful, but we must test them and assess the degree to which they seem reasonable and defensible. If they are well grounded, then they provide a strong basis to evaluate the rest of the proposal.

3. What options were considered and dismissed? Different potential solutions often get discarded as a proposal takes shape. Asking about them provides insight into the analytical process and the perceived constraints that have influenced the development of the project opportunity. This may reveal evaluation bias — or better explain why specific options were chosen at the expense of others.

4. What are the risks? Several risk dimensions need to be evaluated: 1) Has an acceptable level of diligence gone into identifying and evaluating the potential risks of the proposed project? 2) Do you agree with them, and are you satisfied with the assessment of probability, impact and strategy to address the risks? 3) Is this in keeping with the risk appetite and tolerance of the organization? Is it okay that these risks might occur, and how they will be responded to.

?5. How realistic are the costs? There is a tendency to lowball costs, downplay risks, and excessively inflate benefits in order to make projects look more attractive. Understanding assumptions and risks is an important part of evaluating the due diligence of the resulting estimates. So is assessing how sensitive they are to change, and what would happen to the project — and its viability — if they did.

6. How realistic are the benefits? We need to critically assess the viability and reasonability of the proposed benefits. Test the assumptions they are based on, and test their practicality in real life, if possible. Also remember most benefits take time to realize; performance typically declines, even with a materially better solution, before it gets better, and it often takes longer to embrace and incorporate new solutions than assumed.

7. Are we comfortable moving forward? If the other questions have been well-answered and there is still reluctance to proceed, what is influencing that hesitation? Sometimes this is solely the result of caution and inherent risk aversion. Recognize that there is no such thing as perfect information. What is critical is being clear about organizational priorities, assessing the degree to which a a project meets those priorities, and evaluating whether sufficient diligence has been done to ensure the project is well positioned for success.