One of the pivotal activities of our consulting practice for more than two decades has been the assessment of business opportunities for various kinds of clients. The ability to judge likely future success
before market entry is what opportunity assessment is all about.
What kinds of clients do we serve? Here's one way to characterize them:
Granting institutions evaluating incoming proposals
Venture investors gaging future value
Universities assessing their intellectual property
Enterprises evaluating potential external engagements
Enterprises evaluating internally imagined opportunities
You ask: Isn't predicting future success essentially a guessing game? Well, actually no. The overwhelming ingredients are knowledge, skills, objectivity and common sense. Sure, guesswork plays a role, but only a minor role.
The need for knowledge and skills is obvious. This includes things like awareness of target markets and trends, knowledge of relevant technologies, proven processes for getting at "truth", the ability to identify and empathize with users of prospective products, an understanding of competitive forces in various regions, and the like. In my view the best ways to martial all the necessary knowledge and skills are (1) direct personal experience and (2)
Then there's objectivity. That's another important ingredient of opportunity assessment that we and other management advisors have to sell. It's also the ingredient that's often lacking within the boundaries of client organizations and one reason why consultants are hired in the first place.
By the way, some prospective clients do not engage outside advice and opinion specifically because they do not seek objectivity! Not a great attitude in my opinion, but of course I'm biased.
This "objectivity dilemma" is especially acute in enterprises that are evaluating
internally imagined business opportunities. The avoidance of outside assistance and advice is certainly appropriate in many situations where opportunity assessment is routine, straightforward and readily handled internally. But, in my experience, those situations are actually quite rare.
The problem is
momentum. Once an internally generated idea takes hold and has significant resources allocated to it, the organization becomes reluctant to risk derailing it by seeking outside advice and assistance. In this case momentum risks failure, or at least disappointment, in the marketplace. Seeking a second opinion from a competent, objective advisor - the sooner the better - is often a worthy step.
That's my story, and I'm sticking to it. You can read some of my prior thoughts on opportunity assessment specifically as it relates to new products in either short form or long form. Please share your own take on this issue.