Goal Achievement Probability Rating service
An interview with Arthur Lipper regarding his new Goal Achievement Probability Rating service
San Diego, California USA - An interview with Arthur Lipper regarding his new Goal Achievement Probability Rating service
Q: Ok, Arthur, so you have conceived of still another service intended to help both entrepreneurs and private company investors. Tell us about your new Goal Achievement Probability ratings service or GAPR.
A: Actually, the GAPR is applicable to in many situations and for the benefit of an even broad range of users. I have just focused on entrepreneurs and private company investors as these are the groups with which I have an authority base and this should make the initial marketing of the service easier.
Q: Well, what does GAPR do?
A: I can't resist asking you which of the words needs clarification? I always try to reduce issues to their most direct and basic form. Goals are the objectives established by individuals for themselves or others. They can be very personal, such as; to lose weight, stop drinking to excess, study and get an advanced degree, etc. or they can be business focused such as; increase sales by 40% in a year, orchestrate a financing of $3.0 million within the next 6 months, hire 4 new engineers at no more than $75,000 apiece in direct compensation, persuade the landlord to reduce the rent or defer some of the payments, get the new model launched within the next 12 months or to sell the company for twice the revenues of the last 12 months within the next 12 months.
Q: And achievement means doing one of those things listed by the person who has the responsibility of doing them, in the time frame predicted?
Q: How do you assign a probability to the achievement of the goals?
A: By knowing the right questions to ask the person establishing the goals. I do not have to know all of the answers. I just have to know the right questions to ask and after almost 50 years of participating in and observing the company management, especially early stage companies, process I believe I truly do know the right questions to ask.
Q: And you then give the person establishing the goals an alphabetic rating as to your assessment of the probability of their achieving the goals?
A: Right. Two things are important to understand. First the questionnaire I send the goal maker includes questions regarding the assets available to support the project. If he expects to increase sales by 40% in a 12 month period, then he best have available an adequate budget and personnel to do so. If his response indicates that such financial support is not available the rating is not likely to be high. Also if he and his associates have not previously had the experience of managing such a fast growth of revenues the probability rating is likely to reflect a skepticism. Therefore the questionnaire itself become a management consulting tool and is of great benefit as it forces focused contemplation. Secondly, the person using the GAPR can control the probability rating by the aggressiveness of the goal. In other words, the goal of a 10% increase in sales in 12 months is much more likely to get an "A" probability rating if there are working capital constraints. Therefore, the user of the GAPR service can influence, if not control, the probability rating by the extreme to conservative establishing of the goal.
Q: But what good is the rating and why would anyone pay you $1,000 if they can control the probability rating by the goals they establish?
A: Good question and the answer is to gain the benefit of a reality check as to their goals and also to give others confidence that, at least as far as the specified goal, there is an independent and knowledgeable party who, after studying the answers received in response to the right questions, has concluded there is a given probability of the goal being achieved.
Q: It sounds as if many so-called experts could perform the same service as all they have to do is ask the right questions.
A: No doubt they could, if they really know and ask the right questions. All I am doing is creating a cost-effective mechanism to deliver benefit to GAPR users. As opposed to a range of service providers, such as investment bankers, consulting and accounting firms, I am not concerned with liability issues as I am not probability rating an entire company, only a specific goal and perhaps only of a specific department within or aspect of the company.
Q:How did you arrive at the $1,000 per probability rating? Why not $100 or $10,000
A: Because I thought $1,000 to be a fair price for the effort and benefit involved.
Q: How will we know if your ratings prove to be valid?
A: As I expect to be dealing with mostly private companies and many of them may choose not to make known the probability rating it will be difficult to do a performance review. Of course, the very exercise of responding to the questionnaire and perhaps adjusting the expectation or goal will more than justify the expense. Also, where the company chooses to make known the probability rating, when it is favorable, regarding a goal of some overall significance to a prospective investor there will be a promotional benefit to the company.
Q: Ok, last question, we understand what the GAPR service is and why it is useful and a good value to the companies, but why are you investing the energy to create and provide the service?
A: To serve a large number of clients, create benefit and value and to make a lot of money.
Author/Correspondent's Profile: Arthur Lipper III, Chairman, British Far East Holdings Ltd.