Steak or Sizzle: What sells in your organization?
• Relies on business logic to assess the viability of an idea.
• Tries to 'prove' or 'promise' business results using common business financial ratios.
• Identifies decision criteria and compares the top alternatively accordingly (including doing nothing).
Preparing a solid business case takes time and thought. But this step is critical if you want to ensure that that key organizational decisions are based on business strategy, facts, and data versus the more expeditious, but less compelling "I think and I believe" approach. Ideally, the process of preparing and reviewing a business case guarantees that the smartest thinking prevails, that the best ideas are made better, and that the concerns and known downsides of a particular path are clear, discussible, and trackable (for even a great idea requires great execution to be successful).
The temptation many managers face when presenting to senior management is to try and seek agreement quickly and easily. The bad news is minimized and the upside is exaggerated or communicated more via enthusiasm than facts. A standard business case template will guard against these tendencies because it requires answers to pre-determined questions, a review of both the good and bad news, and a summary of competing arguments and hypotheses. It forces everyone to look at the issue from a variety of angles so that different perspectives can be anticipated rather than dodged, and there can be collectively thoughtful decisions made on which direction to pursue.
What Makes the Case?
Dr. John Sullivan, who has developed and overseen business case preparation for over 25 years for companies ranging from Hewlett Packard and Cisco to small business owners, has found that there is very little variation in what constitutes a compelling business case. "It turns out that most financial professionals and executives are very logical people. What they expect is surprisingly consistent with businesses of all different kinds and sizes."
Most executives agree that there are 12 key questions that a business case must address:
1. How do we know that there is a viable problem to solve or business opportunity to pursue? What data and what analysis ARE being used, and what SHOULD be used to make that assessment?
2. What are the decision criteria? What key business metrics should guide a 'go/no go' decision? What result do we need to look for in those metrics?
3. What are the promised results of the solutions being proposed?
4. How will the proposed solution help drive current organizational goals and priorities? Can the impact of this program on these larger goals and priorities be quantified versus inferred?
