I recently had a board meeting for one of my portfolio companies and was upset because during the sales pipeline review we only heard great things about the pipeline, new closed deals, and the possibility of beating our quarter yet again. What bothered me, however, was that we did not spend enough time discussing the big losses or missed opportunities. Evaluating losses is a great leading indicator for health in a business. If you can get to the heart of why you are losing deals early on, you can prevent big problems down the line. More often than not, management teams will do the opposite and revel in their victories and not spend enough time in defeat. Great management teams, however, will learn from their losses and missed opportunities – they will learn what went wrong and why to make sure it never happens again. This is like preventitive medicine – diagnose early before large problems arise. This, in my mind, is an important trait to institutionalize in a company. While hitting your quarter is a great thing, if you never take a proactive stance and do post mortems on lost opportunities, your competition will eventually catch up to you. Talk to the prospect and try to understand whether it was the process, the sales person, the product, pricing or competition. After a few of these data points, you will have a better view of why you lost and what you can do to fix it. I strongly believe that you can learn just as much from your losses as you can from your wins.
Published by Ed Sim
