Your Pipeline Probably Isn't as Healthy as You Think It Is

I’ve sat in plenty of commercial meetings where somebody has proudly put a very large pipeline number on the screen.

Eight figures. Sometimes considerably more.

Everyone feels slightly better. The board relaxes a little. The sales team looks busy. The target suddenly feels achievable.

Then you start asking questions.

How much of it has a confirmed budget? Who actually makes the decision? Have we met them? Why is this opportunity at 80%? What happens if the customer simply does nothing?

And the question I keep coming back to: what has the customer actually done?

Not what have they said. Done.

That is normally where things start getting interesting.

A CRM can give you a very convincing version of reality

I’ve inherited and reviewed a fair few pipelines over the years. I’ve seen beautifully presented dashboards with impressive coverage ratios, sensible-looking probabilities and enough opportunities to apparently deliver the target several times over.

Then you speak to the people running the deals.

One opportunity hasn’t moved for four months. Another depends on funding that hasn’t been approved. One has no access to the decision maker. Another has been sitting at 90% because moving it backwards feels like admitting failure.

The headline number suddenly looks rather different.

This usually isn’t dishonesty. Salespeople are naturally optimistic. Frankly, you probably want them to be. The problem starts when optimism gets turned into financial forecasting.

Pipeline and forecast are not the same thing

Pipeline tells you what might happen. Forecast tells you what you genuinely expect to happen.

A healthy business needs both.

You absolutely want early-stage opportunities, speculative opportunities and things that may become significant six or twelve months from now. That is how future revenue gets created. But putting all of those opportunities into one enormous number and calling it pipeline coverage can create a false sense of security.

Three-times coverage sounds reassuring unless two-thirds of it is fiction.

I care more about evidence than percentages

I’ve always been slightly uncomfortable with the traditional 20%, 40%, 60%, 80%, 90% approach. It looks scientific. Often it isn’t.

Ask two salespeople what makes a deal 70% likely to close and you will probably get two completely different answers.

So I tend to ask what evidence exists. Is there an agreed business case? Has budget been allocated? Are we speaking to someone with authority? Is there a compelling reason to act now? Has procurement started? Is there an agreed next step with a date attached?

Those questions are less glamorous than arguing over percentages. They are much more useful.

A smaller pipeline can be good news

When you properly qualify a pipeline for the first time, the number often goes down. Sometimes dramatically.

That can make people nervous. I normally see it as progress.

I would rather run a business with a smaller, well-understood pipeline than a huge collection of opportunities nobody really believes in. Once you know what is real, you can make sensible decisions. Do we need more coverage? Which deals deserve executive attention? Where are opportunities getting stuck? Is this a lead-generation problem, a proposition problem or a conversion problem?

Good commercial leadership is not about being pessimistic. It is about creating enough confidence in the numbers that the rest of the business can make decisions from them.

So the next time someone presents a reassuringly large pipeline, I would not start by asking whether it is three-times target.

I’d ask something simpler.

How much of it would we still believe if we removed the percentages and looked only at the evidence?