Consultants' Corner

Toothpaste or Toilet Paper?

Ron Zimmer
Insurance Experts' Forum, June 21, 2011

In a recent article, an author posed this question: If you have only enough money for one, which would you buy—toothpaste or toilet paper? The responses were about even. It seems there are "toothpaste people" and "toilet paper people."

We are forced to make this kind of choice on a regular basis; we must decide which initiative(s) to fund out of many worthwhile projects. All of the candidates may have benefits, but we are limited by budget or other constraints.

In this economy, many corporate budgets are even more limited than usual. So if you find yourself in this situation, forced to choose among many good projects, how should you make the decision? Developing an objective decision-making model can both help you choose the best projects and build corporate buy-in. Following are five steps to help you determine which project to focus on first.

Identify the mandatory initiatives (e.g., regulatory compliance) and separate them from the discretionary choices. If the projects are truly mandatory for this next year, allocate resources to these tasks first.

If there are a lot of discretionary contenders, it can help to separate them by urgency and importance. Try this:

* Create an Urgent vs. Important grid

* Eliminate subjective influence and place the candidate on the grid by rating its urgency and importance

* Focus on the items that are both important and urgent:


Clearly identify the limitations/constraints, corporate goals, and decision criteria. Be sure to make this a common goal and a shared problem to solve. It is helpful to also have shared consequences such as incentive compensation.

* Identify the decision criteria before you start and get agreement—this is a corporate-level decision

* Determine the scoring system and weights


A decision grid might look like this:



Gather information to satisfy the decision criteria. This may involve creating a business case for each of the potential initiatives. (Be as complete and accurate as possible, but don’t let this turn into "analysis paralysis.")

* Estimate costs as accurately as possible

* Base potential revenue and profitability on facts (market size, penetration rate, competitor strength, etc.)

* Identify other constraints, such as key resources, systems, or knowledge

* Recognize soft benefits, such as brand, reputation, or ease of doing business

* Determine if this initiative will create sustainable differentiation in the marketplace

* Most important, does it add value from a customer perspective (i.e., does it fulfill an important need)?

Define customer needs by specific market segments. Many customer expectations (e.g., competency, efficiency, friendliness, courtesy, and professionalism in delivering service) can be anticipated. Make sure you understand what has changed for your customers. Basic research uncovered that 90% of the U.S. respondents to a recent survey said that they had reduced spending as a result of the recession and that a growing percentage do their own research on the Internet for product features, comparisons, and price. Determine what these and other trends and requirements mean for your initiatives.

Evaluate the choices. Objectively score the candidates for each of the decision criteria. A range of 1=low to 5=high is usually sufficient. Watch for traps like corporate politics, squeaky wheels, "big agent" pressure, mediocre-is-good-enough mind sets, or hidden stuff that was not disclosed. Typically, this creates a priority ranking. But if the scores are too close, re-score using a forced ranking system. (For each decision criteria, rank the candidates against each other).

You may think you are done after you have identified the top projects, but don’t stop there. Because you are offering fewer new products or services this year, ask what is needed to make it special, innovative, or more appealing. What would take it to the next level? 

Be sure to complete the package of product, service, training, communications, executive sponsorship, product introduction, and market rollout. And remember to measure and monitor results and course-correct as needed.

RON ZIMMER is a Senior Consultant for the Robert E. Nolan Company, a management consulting firm specializing in the insurance industry.

Readers are encouraged to respond to Ron using the “Add Your Comments” box below. He also can be reached at

The opinions of bloggers on do not necessarily reflect those of Insurance Networking News.


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