The business leaders must ask themselves a series of questions about the blank check candidate. Is this person a natural choice for the challenge based on his or her current responsibilities and span of control? Will this person be willing to take on the responsibility and not be frozen by fear? Is this person capable of being stretched to think in new ways? Does this person have the capacity to inspire others to do things differently? Does this person have a track record of delivering results? If the answer to any of these questions is no, then the business leaders must consider alternative candidates. And if one cannot be identified, leaders may determine that the area of the business they were targeting is not appropriate for a blank check.
3. Defining goals and plans. Once the business leaders have selected a business domain and chosen the team leaders who will receive a blank check, they need to define the targets they expect the teams to achieve. Targets need to be quantified, aggressive, and time-bound. Quantified targets are unambiguous, so everyone clearly understands the nature and goals of the game. Targets should be measurable on well-defined metrics like revenues, gross margins, and cash flow from the business. Targets also need to be aggressive, to the point that they should not be achievable simply by making incremental improvements. Teams should be forced to question all their assumptions about their business and to confront orthodoxies that have been blindly accepted by the company. Blank check initiatives also need to have a short time frame, limited to a few years at most. It is absolutely essential to have a clearly defined set of goals for the first 12 months. The short time frame forces the team members to produce results quickly. They do not have the luxury of pursuing marginal improvements or initiatives that will take a long time to produce results.
At this stage, the team leaders are asked to submit a short business proposal (no more than two pages) that reflects the three Ms. The time given to the team to develop the proposal is relatively short. This prevents the team from becoming paralyzed by overanalysis. In some cases, the team may take up to a month to produce a proposal so they can weigh the alternatives in order to ensure they are making prudent business decisions that will nonetheless change the business’s trajectory. In a few cases, the team will decide to turn down the blank check. This is fine, because undertaking a blank check initiative must always be voluntary.
The business proposal needs to define the initiative and the key steps that the team will take to produce the agreed-upon results. This includes the goals, the time frame in which the goals will be achieved, steps detailing how the plan will be executed, key milestones and deliverables, and financial projections. At the early proposal stage, the initial execution steps may be outlined, but the full project need not be fully fleshed out.
Along with the proposal, the team also must fill in the amount of the blank check — the financial outlay that they are asking for. The amounts of the blank checks we have been associated with have ranged from a few million dollars to $20 million. The amount should be more than enough for the team to carry out the initiative without worrying about running out of money to invest.
4. Kicking off the initiative. Once the business plan has been agreed upon, business leaders need to formally “issue the check” by approving the amount the team has asked for and transferring it into an account that can be accessed by the team leaders.