Just Say No?

Ups And Downs

ROM may resemble financial measures, but it has its differences. For one thing, it's neither quantitative nor precise. Entrepreneurs must make intuitive estimates of whether employees know what's important, whether managers are focusing on the proper opportunities and so on.

Lack of precision and certainty means you take ROM with a grain of salt. For instance, Khera doesn't apply the same standards to existing clients as he does to new customers. He'll break rules in some instances, like the time a small branch of the Department of Agriculture inquired about a job that didn't meet Khera's new criteria. "This is part of a huge government agency," says Khera. "Because this could lead to a lot of other work down the road, we accepted it."

There's also a risk you'll focus on the wrong measures or, worse, the wrong opportunities. Jeff Gonyo, managing director of Wind Point Partners, a Chicago private equity investment firm that applies ROM-like measures to the companies it invests in, says, "You certainly want them to stick to their [objectives,] but if they're not working, you have to change them."

The risk of inflexibility may be a bigger problem for entrepreneurs than for established companies, simply because it's more difficult to determine whether an opportunity is a good one or bad one. "When you're creating a new industry, there is no right or wrong," notes Gonyo.

But ROM has appealing characteristics. Simons points out that you don't have to go to seminars to learn it, train employees to do it or hire consultants to implement it. You just have to make up your mind. "A lot of ROM is just understanding the importance of discipline and consistency in communicating your agendas," says Simons.

At Khera Communications, making the decision to focus on fewer opportunities has given Khera the gumption to turn down business that was distracting him from better opportunities--and the move has paid off. "The first few times [we turned down work,] it was painful," he admits. "But we had to make a decision and stick to it to see if the process works. And I'm glad we did. It's not painful anymore."

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This article was originally published in the August 1998 print edition of Entrepreneur with the headline: Just Say No?.

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