Nello Zuech, President

Vision Systems International

Identifying opportunities to base a company's expansion decisions and growth strategy on is often done by "gut feel" and with limited input from the staff that ultimately has to take "ownership" for such decisions.

 A better way to pursue corporate growth objectives is to use consensus development techniques. One approach to developing consensus is the use of a nominal group technique (NGT). Another way to view the NGT is as a "structured brainstorming" process.

 Basically this is a session that lasts about six hours. Participants should include 8-14 people from each of the functional disciplines associated with the operations strategic planning and business development activities: marketing, finance, sales, general management, - what ever the titles are associated with your industry/company. A meeting leader/facilitator is required. This could be someone from within or outside the company that ideally knows something about the industry and markets.

 The program should begin with a brief description of the current status and business environment and a review of the objectives of the session. This recognizes that there are different approaches to expanding a business. These can be described in terms of the following classes based on the combination of technology, applications and markets. The table reflects opportunities and characterizes them as falling into the various classes with corresponding risk associated with failure. The risk of failure can be associated with technology, application or market. The higher risk is associated with two "new" assignments and the highest risk with three "new" assignments. Some refer to this class as "suicide".

 This review is then followed by the development of the following profiles:

1. what constitutes the core competencies or technical profile of the company
2. what constitutes the application profile of the company
3. what constitutes the market profile of the company.

 The properties associated with each of the profiles are then reviewed to determine if they should all be given the same weight in terms of relevance to the profile. Those most important to be satisfied in any profile matching considerations should be given a weight of 10. Others should be given a weight between 1-10 depending degree of perceived importance of the specific profile.

 Having so conditioned the participants into thinking about how to identify good business opportunities that will expand the company's business profitably and the corporate "profiles", the nominal group technique can now be executed. This technique is described in depth in "Group Techniques for Program Planning, A Guide to Nominal Group and Delphi Processes", Andre L. Delbecq, Andrew H. Van de Ven and David H. Gustafson, published by Scott, Foresman and Co., Glenview, Illinois, 1975.

 The nominal group technique takes its name from the fact that it is a carefully designed, structured, group process which involves some participants in some activities as independent individuals as well as in the usual interactive mode of conventional groups. It consists of five steps: silent generation, round robin presentation, clarification, voting and ranking, and discussion of results.

Following the overview, the participants are instructed by the facilitator to consider growth opportunities in conjunction with each of the businesses/markets of the company with which they personally have a familiarity.

 In each case considerations should include opportunities based on the discussion surrounding the above table. With the above in mind, the facilitator then asks the participants to silently and independently generate and write a list of business opportunities that can be expected to grow the business. Only ten minutes should be allocated. Given the facilitator is familiar with the company's business he, too, should develop a list.

 Like each of the steps in the nominal group process, silence is purposefully designed. Research has shown that for the creation, generation and production of ideas, individuals are more effective than groups. Thus for this portion of the session, individual behavior is sought. Silent generation focuses attention on a specific task, frees the participants from distractions, and provides an opportunity to think through their ideas rather than to simply react to the comments of others.

 At the end of the ten-minute period, the facilitator interrupts the silent generation process. Participants are instructed to add to their lists any new ideas as they might come up. The round robin listing process then begins. Starting around the table each participant in turn is invited to nominate one of the business opportunity ideas from his list. Since these are to be recorded, the participants are asked to provide short phrases if possible. As each participant responds, the facilitator repeats verbatim what has been said, and records the phrase on a sheet of easel pad. No other discussion should occur during this phase. If a participant has difficulty expressing a contribution in a short phrase, the facilitator may assist. However, the facilitator must be very careful to ask the participant whether any proposed phrasing does indeed capture the idea involved.

 The participants are advised that on any occasion and for whatever reason, they may simply say "pass," rather than nominate an opportunity. (Some will pass on the first round but contribute on later rounds.) The process goes on until all the ideas generated by the group are listed and displayed. The round robin step permits the leader to establish an atmosphere of acceptance and trust. He does not rephrase or evaluate the contributions and they are equally and prominently displayed before the group. Each idea and each participant receive equal attention and non-critical acceptance.

 There is little opportunity for the process to be dominated by strong personalities, inhibited by possible sanctions or conflicts, or suppressed by status differences. The process separates ideas from their authors and permits conflicting and incompatible ideas to be explicitly tolerated. It provides a written record of the group's efforts as a basis for the next steps. Any tendency for the pace of group efforts to slacken or for activities to fall into a rut is avoided.

With the listing of all business expansion opportunities generated by the group, the facilitator goes through the opportunities one by one, asking if any clarification is necessary for their understanding. It is emphasized that anyone can clarify. It is not required that the authors of the idea do so. The facilitator moves rapidly from one listed opportunity to the next, keeping up the pace of the process. During this step the underlying logic behind the proposed business opportunity may be brought out, there may be some expressions of differences of opinion, and the group may conclude that some opportunities can be eliminated or combined because they duplicate others. In the elimination process, the facilitator needs to get a quick consensus, not eliminating an opportunity that any member sees as necessary to the list.

 Pace is important to this step and the facilitator's job is to keep the group moving rapidly through the list of business opportunities developed. While in this phase the group is more like an interacting one, the facilitator seeks to control lengthy discussions, arguments, and "speech making." Again, the effort is to separate ideas from their authors, to clarify rather than to evaluate, and to insure full opportunities for participation.

Having developed the list, the facilitator then reviews the above-developed corporate profiles one at a time.

 After the technical profile is reviewed, the next step is to invite the participants to vote. The first vote is based on the technical profile. Each participant is advised that he has "X" votes. The number of participants and the number of business opportunities developed during the Round Robin session determine the actual number of votes. Typically, each participant is given 10 votes. The participant physically votes by applying a hash mark alongside the ten opportunities that he feels most matches the corporate technical profile.

 This is then followed by a review of the application profile and, voting with a different colored marker, by applying a hash mark along side of the ten opportunities the participant feels most closely matches the corporate application profile. This is finally followed by a review of the market profile and again voting with a different colored market by applying a hash mark along side of the ten opportunities the participant feels most closely matches the corporate market profile.

 This step serves the fundamental purpose of permitting the participants to express their individual evaluations of the business opportunities in a way which is free of social pressure. It provides a constructive method of dealing with conflicts, and leads to a clear expression of whatever degree of consensus there may be with respect to the importance of the respective business opportunities generated. It provides a strong sense of closure, a feeling of group accomplishment, and a high level of interest in future steps in the process of new business opportunity development. While participants may not individually agree with the final product, they will typically support it as the achievement of their group.

 The session closes with a brief discussion of the results of the voting process in which the facilitator emphasizes those business opportunities that consistently received the highest number of votes and about which there is strong consensus. He may ask the group if they would like to eliminate from further consideration any opportunities that received no votes. Again, this should not be done unless there is complete consensus. No participant should be overridden here.

 At this point the session can be brought to a close or another round of structured evaluation can be conducted. In this round, the five most important business opportunities are listed and the participants are then asked to assess how each of the opportunities matches each of the properties of each of the above mentioned profiles on a scale of 1 - 10 where 10 represents the highest match. Each is then asked to sum up the scores derived by multiplying the match score and property weight. Summing up the scores will lead to a final ranking of the five opportunities perceived to have the highest value to the facility. First the participant scores for each of the opportunities is summed on a profile by profile basis and then these opportunity scores are summed.

 Alternatively, the results of the opportunity rankings so derived by each of the participants can be used. In this case, the business opportunity receiving the highest score would be given a five and the lowest a one. These values would then be used to determine the final ranking of the opportunities. Generally there is agreement between both of these techniques for determining the final opportunity ranking.

 The results of the use of the nominal group tactic will be the identification of the most valuable business opportunities to pursue for business expansion, consensus on the importance of that opportunity and development of a sense of ownership associated with the opportunity - a "buying in" by all participants and identification of a champion. The ultimate result is improving the chances for successful business expansion with bottom line payback.