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Too many meetings? Email overflow? Voicemail out of control? Long hours and missed commitments?
Every day, dozens of people download a business case template from my website. It has been used by universities, Fortune 100 companies and the leading management consultancies. Some people follow up with questions.
Truth be told, a template alone is not a guarantee for a great proposal or business case. I have compiled a list of thirty tips that should be useful for managers, business development and sales people, and anyone else potentially facing the need to develop one.
1. Your case should have an objective: a real problem you are looking to resolve or an opportunity you are looking to take advantage of. Be clear on the raison d’être for your case. Rolling out a CRM system is not an objective but one of the alternatives; improving client affinity and increasing sales per client may be a legitimate objective.
2. Your perception of something being a problem or an opportunity may be entirely different from that of the decision makers. If you believe you are right and they just aren’t aware, do an exceptional work in explaining it so that they understand. Often, we see people spending months working on a case for a problem that they believe exists just to hear from a decision maker: “Look, this is really a non-issue.” Before embarking on a proposal, check upstairs if the issue is seen as warranting attention.
3. The size of a business case is not something you should be concerned about. Concentrate on the content instead, tell the story. The case should adequately present your proposal and, at times, two pages will be too many and, at times, two hundred pages will be too few.
4. Always present more than one alternative within your business case. What is the right number? Three or four should do it.
5. Do not introduce weak “straw man” alternatives which try to steer the decision makers towards the solution you favour. It is usually obvious.
6. I cannot stress this enough: do your absolute best in creating strong, viable alternatives, well thought through and diverse. If you don’t, a decision maker may introduce one during the presentation, which will be embarrassing and require time to evaluate. If that doesn’t happen, the decision will be limited to a potentially incomplete, deficient set, of which Shakespeare said “There’s small choice in rotten apples.”
7. Always recommend one of the alternatives. Firstly, because you are the author of the case, you will be expected to know more about it than anybody else and, hence, know which option is the best. Secondly, even if the decision makers disagree with your recommendation, you will at least have shown them that you have an opinion, which commands respect.
8. Every proposal has its audience. Choose the language so that they don’t have to work too hard to understand what you are saying. If the audience is external to your department, division or company, increasingly more detail will be required. The jargon, the acronyms, the oh-so-obvious to you process flows may need to be explained in fine detail. Conversely, if the case is for internal consumption only, there is no point in explaining obvious everyday things.
9. Different people think differently: some are big picture strategists, others are detail oriented. Some are risk-averse and others like the challenge of the unknown. People make decisions using their internal frames of reference, which are formed through juxtaposition of cultural norms, values, education, life experiences, memes, current events, and so on. An author of a business case will be best served to understand how the target decision makers tend to make decision, so that she could structure her message accordingly.
10. Expose key decision makers to findings as you go about developing the case to gauge their reaction and adjust the course if needed. If your proposal or business case has a sponsor, such as a senior executive, avoid surprising them at all cost.
11. Make your audience “own” important or contentious data. For example, obtain sales projections or cost assumptions from the head of the business unit, CFO or COO. If they or their subordinates are among the decision makers, not only will these numbers be challenged, the people who provided them will likely feel compelled to support your case.
12. Know your numbers cold.
13. Take the time to determine where the opposition is likely to come from and prepare to address most likely concerns. There is really no excuse for being unprepared.
14. If you are writing a proposal in response to a client’s request, remember that most clients know what they want, but few know what they need (for this reason, RFPs are a wrong vehicle for acquiring consulting services).Time invested to understand the real needs will pay off handsomely as in many cases you will be able to expand the scope significantly. Even if you cannot do that, for example, due to time constraints, always offer the client a choice of an alternative that delivers incredible value at a price above the stated budget.
15. Use the business case format with which is already adopted in the organization. If there isn’t one, you can download free business case template from my web site.
16. Be concise, clear, logical and persuasive in style.
17. When unsure how much of the numerical data (eg projections, pro forma earnings, etc) to present in a live meeting, start with summaries but always have detailed information in your back pocket. Likewise, in a written case, it is a good idea not to burden the write-up with extensive tables or derivations but to attach them as appendices.
18. Always identify your sources of data.
19. Ensure that your data sources are reliable. Despite the proven accuracy of Wikipedia, it is best not to use it as a source if information because its validity can be easily questioned.
20. Never cast blame or accuse anyone (e.g. past management, departed project teams, third parties, etc) for the current condition. It is irrelevant and can lead to unintended consequences, like in “You know, the former project lead you have just lambasted is the CFO’s wife…”
21. If your proposal or business case includes financial cost-benefit analysis, as most of them should, use the method which your organization is familiar with.
22. If you have a choice of a method of financial cost-benefit analysis, make sure you understand pros, cons and limitations of each of them. Not every method is appropriate for every situation. As a primer, this two-part article should be useful.
23. If you are not familiar with financial cost-benefit analysis methodologies, engage external help. Contrary to a common belief, this is not a job for an accountant. The cost of doing this is negligible compared to that of possible ramifications of it not being done right.
24. Two key principles to keep in mind for your cost-benefit analysis: realism and attribution (only consider effects directly attributable to the proposed course of action).
25. Cost-benefit analysis should not be limited to financial considerations. Consider the wide variety of benefits (or costs, which are reverse): industry leadership, strategic advancement, increased capacity, improved safety, reduced environmental impact, introduction of best industry practices, improved image, benefits to a friendly third party, doing the right thing, and so on.
26. Beware of the cost-cutting mindset, which stifles innovation and breeds self-censorship. Costs and benefits should be considered in a holistic, balanced manner, so that penny pinching does not eclipse blazing non-financial wins your proposal may offer. For this reason, I advise organizations against establishing arbitrary hurdle rates (e.g. “To be considered, you proposal need to show IRR of 20 per cent”).
27. No business case or proposal is complete without a risk assessment for each of the alternatives presented. Consider both likelihood and impact of each risk and be realistic in your assessment.
28. The key to adequate risk assessment is a stakeholder analysis done well.
29. Be prepared to discuss the business case in three different settings: a 30-second status update, a 5-minute brief with questions and answers, and a 30-minute presentation. I also advise managers, project managers and team leads to be ready for these three types of communication at all times. Caveat: there is usually a fair warning for the presentation, so that you have the time to think it through and prepare.
30. When you present your proposal, questions will be about implementation are likely. The popular topics are resources and timing. Often, you will already have explored these items, which will enable you to provide an informed answer. If you haven’t, think before the session how you would respond. Answers that don’t go well: “We don’t know yet”, “We will decide later”, or “We haven’t thought of that. ”
Nine out of ten business cases that cross my desk contain material errors, which often lead to incorrect recommendations worth tens of millions of dollars. If you ever wondered why two thirds of change initiatives fail, here’s your answer: many of them are based on a fallacy, a case that does not exist.
The issues run the gamut from poor understanding of objectives to complete disregard for the established methods of economic analysis, from strategic ignorance to financial ignorance.
Decisions on outsourcing and insourcing are also not immune from this flawed approach. In fact, many of them are deficient for one specific reason which I will outline here.
I have just finished presenting a teleconference on time management for managers and executives, titled “The Closed Door Policy. ” We talked about 11 reasons behind the widespread phenomenon of being chronically busy and a couple of dozens ways, neatly organized in three categories to get one’s life back.
Here are the reasons for so many people being in this pickle:
- You are a funnel. Nothing happens unless you know about it or have to give a go-ahead.
- Your choice of decision making approach is often incorrect.
- You lack adequate support structure (people, tools, processes)
- Your priorities are not clear: you either don’t know what to do next or everything is a priority. If everything is a priority, nothing is a priority.
- You believe that you need to constantly do “real work” because thinking and strategizing is not really work at all.
- You do things that don’t need to be done.
- There is a lack of trust between you and people around you: peers, subordinates and superiors.
- You constantly look for confirmation and consensus building where it is not required.
- You are holding on to your baggage of an expert (typical for an engineer who has been promoted to a manager).
- You cannot say “no” to anyone.
- You procrastinate.
A couple of days ago I interviewed Michael Elkins, the President of Kestral Group LLC, a Denver, Colorado-based consulting company that delivers strategic knowledge and content management related services to a global list of clients.
Michael and I discussed the key success factors in knowledge management (KM) initiatives, how to create the culture of knowledge sharing, the typical pitfalls of KM projects, why Schlumberger saw this as an important direction and other like topics.
Mr. Elkins has over 18 years of experience working with organizations in numerous industries to establish successful knowledge-based programs. Prior to founding Kestral Group Mr. Elkins held executive and consulting roles with FileNet Corporation, Convergent Group and Schlumberger, a MAKE award winner, where he honed his skills and delivered KM services for global clients.
His areas of expertise include:
• Social Network Analysis
• Information Architecture / Taxonomy
• Enterprise Content Management and Collaboration
You are about to listen to a recording of my conversation with Douglas Weidner, Chairman of the Knowledge Management Institute (KMI).
Douglas Weidner is a pioneering KM practitioner. He is a respected KM consultant, columnist, speaker and mentor. He co-founded the first KM professional society and is a past president of its Washington, DC-based Chapter.
Formerly a Chief Knowledge Engineer at Northrop Grumman. Among his clients are World Bank, the UN, NASA, the World Health Organization and many other government agencies and commercial firms.
Some of the topics we chatted about include:
- the right place to start a KM initiative
- how to encourage grassroots projects
- how to avoid throwing millions of dollars out of the window
- who should lead KM work at the executive level
- the future of KM
Tune in !
This is a first interview in what promises to be an exciting series of conversations on the subject of Knowledge Management.
Mr. Wahl is the Director of Information Management for Project Performance Corporation (PPC), which has helped over 200 public and private organizations successfully implement portals, content management, collaboration, social computing, and other information management systems.
He has supported a variety of organizations including Pratt & Whitney; Columbia University; the Department of Defense (DoD); the International Monetary Fund; March of Dimes; Rockwell Automation; and the U.S. Department of Energy (DOE).
He also sits on the board of the Washington D.C. based Knowledge Management Institute and is Chair of IIRUSA’s Annual Enterprise Web, Portals, and Collaborative Technologies Conference.
Later this year, I am conducting a webinar on the art of dispute as a part of the Excellence in Leadership series. If you have ever been in a situation where you knew that your opponent was wrong but couldn’t effectively argue his point of view, you know why this is a highly valuable skill. This morning, I was jotting down some most salient points for this session and thought that I should share one with you today.
We make decisions on a daily basis, many times a day: how to get to Memphis, what to have for dinner, what to wear, which espresso maker to buy and so on. Similarly in a business settings, people make operating and investment decisions: which project to select, how to enter a new market, who to hire, and so on. Why doing so, in life and in business, decisions are influenced by recommenders – friends, family, experts, employees, superiors, vendors, consultants, and others.
Although not a debate per se, a recommendation is similar to it in that the other party offers an argument to support their point of view. A decision maker listens to recommendations and makes a decision.
Here is my point. Never ever accept a recommendation or an argument that you don’t understand.
I see a lot of people in a lot of organizations all charged with making decisions. It’s a commonplace occurence that they make decisions to the tune of millions of dollars based on recommendations they don’t understand: a financial workup, results of a marketing survey, sales projections, etc. It only so happens that the financial workup contains errors, the methodology behind the marketing survey is flawed and the sales projections are based on best case scenario assumptions.
The resulting decision cannot possibly be sound. The result: wasted resources, lost time, overlooked opportunities.
I think the following is in order when listening to what recommenders have to say:
- if you don’t understand something, ask for an explanation. It is not a weakness but a sign of a confident decision maker
- probe and examine the recommender’s data and assumptions carefully
- understand the recommender’s interests. What do they stand to gain from your following their recommendation? Does it influence their recommendation?
- in cases where you are not in a position to validate an argument (e.g. a financial cost-benefit analysis), ask an authority on the subject to do it for you.
- never let yourself to be forced into the thinking that there is only one alternative to be considered
- think critically and ask critical questions.
In my observation, accepting the argument that is not well understood is even more of a problem in a group setting, such as a meeting. There is an implicit pressure to agree and no one want to look ignorant by asking for an explanation. (Since everyone else is quiet, they MUST understand it. I don’t want to look stupid, so I will pretend that I do too.)
Don’t let this to happen to you. Ask questions, make the right decisions, and thrive!
If you are looking to outsource or change processes in a multisite organization, you will face a typical organizational design challenge: how do I structure and locate teams to maximize their collective performance. In this article, I will share some of the most salient points which must be considered. This is a result of our work with our most successful clients.
Let’s talk about this concept – repeated ad nauseum by managers and HR staff all over the world like a sacred mantra — the concept of a team.
Everyone talks about teams and the team building. Inordinate amounts of money are spent on retreats, exercises and training which provide no lasting value. Rare is a job posting that does not include a requirement for a candidate to be a “team player”, which is just gratuitous in this context. Who would say that they are not one?
A local photographer decided that he does not like selling and marketing as much as he liked taking pictures, so he outsourced it to a small local firm. We received a call from them today, which in its abridged version went something like this:
Saleswoman: “Hi, this is Brenda from Such-n-such Photography. We would like to come to your home and take a picture of your baby – free of charge.”
Kim: “Sounds good. How many pictures are included?”
Saleswoman: “Oh, just one pose, one picture”
Kim: “Can additional pictures be ordered?”
Saleswoman:”Yes, packages start at $120″
Kim: “What is included in a package?”
Saleswoman (miffed): “I have no idea, I just book appointments”
Kim: “Thank you. Not interested”
Outsourcing is as old as the hills and we all do that – I don’t deliver my correspondence in person but the postoffice and courier companies do – but remember that judgement needs to apply.
You should consider outsourcing non-core activities that others do either better or cheaper (while maintaining acceptable quality) than you do in house. For the vast majority of businesses, relationship with clients is a core activity and should never be outsourced. The issue in this particular case is therefore twofold: not only a third party is retained to perform a core activity but, also, they cannot do it well.
You may be reading this and saying to yourself, “but of course, it’s asinine!” You may feel that what I am saying is just common sense.
The trouble is, even large and sophisticated business often make outsourcing decisions that seem to be against this very common sense.
It turns out that common sense can be remarkably uncommon…