Plenty of organisations have trouble starting things, but in my experience as a coach and advisor, they have even more trouble stopping them.
Those who play the commodity futures market understand the fine line between stop and start…“knowing when to hold ‘em, knowing when to fold ‘em” is the crucial difference between soaring success or crippling failure, especially in a game that moves fast.
Here are three disciplines about ‘stopping’ that I learned from the experts and from my own experience in trading, and how to apply these in your business.
First, have a clear early get-out signal. In my case I trained the broker to ask my exits at the point I entered a trade. Normally it was either a dollar risk (for example, I don’t want to risk more than x on a trade) or because it breaks a level of market support. Either way, once the wire is tripped the trade was closed.
How quickly do you know you’re wrong on any of your current business initiatives? Where is the risk right now? What could be your get-out signal? Consider this – if these specific things happen, we’re out.
Second, if a trade started to go my way, I had a trailing stop. It’s a little bit outside the market action, but close enough that if it triggered we’d locked in most of the achievable profit. But it also meant that if the intended trajectory is no longer being achieved we’re out and would apply our resources elsewhere.
Do you have a monitoring approach that highlights when an initiative has tipped over? Perhaps it’s the financial projections in the business case being breached, or a critical person departing.
Finally, there’s an end-point which reflects when we’d conclude a trade. Perhaps it’s time-based (for instance, day traders often close their positions at the end of a day to avoid carrying risk overnight), or it could be a price target, which we expect is the likely maximum we’ll earn from the trade.
How will you know it is time to end a project? Do you project the results that you anticipate and then happily take the money off the table at that point? Or can you effectively track the product or service trend that you’re riding and gracefully exit when its ending?
In futures, we know that only a handful of players make the money – and in a virtually zero sum game, they make the money that everyone else loses. This is not a game of certainties. Rather it’s a game of probabilities, so a model and plan is needed that reflects that truth.
Your game of business is probably the same. Lots of R&D innovation fails, plenty of new products flop, cost structures can change rapidly and, let’s face it, technology projects are legendary for their challenges.
Don’t wait for the roll of the dice, make your own luck. After all, you hold all the cards.