Leaders are expected to plan, developing an over-arching strategy for their team and organization. Whether it’s technology investments in new tools, processes, or headcount, leaders need resources. But how does one get what they want when approvals are needed? It’s simple, actually. Ensure your business case focuses on what matters most to those in a position of power – money.
Making Business Cases
To this day, I still find it fascinating how many leaders fail to understand and appreciate the importance of building a business case. I’ve witnessed too many people try to make a case for change or investment based purely on their feelings. Often frustrated and disappointed that their idea doesn’t move forward, these inexperienced leaders lack the insight that they need to apply some logic and rationale to justify the investment. Some don’t understand that senior leaders and executives are concerned most with money and the financial implications of decisions. Time is money. The effort put against a project has a cost, but that’s often neglected in pitching an idea. Return-on-investment (ROI) is something that’s usually not considered.
Essential Elements Of Making A Business Case
I’ve made many business cases over the years, with varying degrees of simplicity and complexity. Depending on the ask or plan, the business case I present could be an email, report, or full-blown presentation. Regardless of the medium, there are 4 key elements I include in every business case.
- Summary & Impact – An explanation of the problem we are trying to solve. Include why this issue requires attention now and not later.
- Options – What are the 3-4 options to solve the problem noted in summary? Include the “Do Nothing” option, sharing the risks associated with not moving forward. Leaders like to see foresight to include the pros & cons of the options.
- Recommendation – What’s the preferred option? Here you should share your evaluation criteria for choosing that selection. Explain your thought process and why you are recommending this solution.
- Justification – How will implementing this recommendation provide value to the organization, team, or customer experience from a monetary perspective? In this section, you need to indicate how success will be defined in terms of metrics and impact.
Justifying A Business Case
I find there are three main ways to justify investing in a business case.
- The project will increase revenue
- The initiative will save the team or organization money
- The effort will enhance the customer experience
Framing your business case against some or all of these justifications helps show the value of doing whatever you are proposing. Doing so further adds some logic to your request, provided that you are backing it up with the correct metrics for measuring success. If a project can show a return on investment sooner based on the level of effort, it could win.
Ultimately, organizations are looking for low effort, high value projects as they tend to be quick wins. Investment in a high effort, the high-value project will need to be planned and scheduled appropriately based on resources. Projects that offer low value with low effort might be distractions, not worth the time. Initiatives with tons of effort and low-value scream that they are not worth pursuing.
Final Thoughts
Sizing up your business case is essential to drive change and continuous improvement. Without sizing up the level of effort and overall value, it’s easy to waste resources if you somehow convince people to take action. Build your business case the right way to remember the 4 key elements noted previously. You will ensure the right projects are tackled. Sometimes going through the process will tell you that the project isn’t worth it, saving you time and maybe even the embarrassment of pitching a terrible idea in the first place.
