HMM In Brief on Business Case

Harvard ManageMentor In Brief on Business Case Development

It's the fourth weekend in a row that you've had to work. And it's not just you. All of your direct reports are working overtime as well. There doesn't seem to be an end in sight. You've had it. You can't possibly continue at this pace. You need more resources. It's time to go to the boss. It's time to build a business case for hiring more people...Or is it?

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Well, the answer is "yes and no." Yes, this is a good situation for developing a business case. But no, your best bet is not to try to immediately justify hiringmore staff. In this example, one solution may be to hire additional full-time employees. However, a better solution might be to hire contractors. Or it might be to change the way work is distributed between teams. If you rush to justify hiring new employees and don't consider a universe of options first, you may not make the best business decision. Building a business case can help you avoid this common mistake.

Developing a business case is a process for identifying and considering multiple alternatives before making a well-informed recommendation. If you're thinking that this sounds similar to problem solving — you're right. In many ways, the two processes are the same. To build a business case, you:

1. Define the problem or opportunity
2. Identify and analyze alternatives, and
3. Present your final recommendations to key stakeholders

Let's take a look at the art of developing a business case in practice by exploring each of these steps.

In the first step, defining your problem or opportunity, you describe the situation and the business objectives that your proposal will impact. In our example, the issue is that your team cannot complete its responsibilities during normal business hours.

Start with an opportunity statement. Ask yourself the question, "How will my group, unit, or company benefit from addressing this issue?" In our example, the answer might be, "Addressing the recent increase in workload will help our group better serve our clients and improve employee morale."

Once you've written a positive opportunity statement, identify the most relevant business objectives for this case. Then prioritize them, and select three or four to use to analyze your alternatives later in the process. In our example, your business objectives might be increased customer satisfaction, improved employee morale, and the overall cost of each alternative.

With your statement and business objectives in hand, you're now ready for step two of the process — identifying and analyzing alternatives . So you should block out some time in your schedule to sit down and create a list of approaches — right?

Not exactly. If you work alone, you're less likely to develop a comprehensive list of alternatives than if you work with a group. For example, you might have a "limiting" mindset, such as believing that "consultants are expensive and should never be used."

To avoid this and other common traps, convene a group of stakeholders and ask them to brainstorm ideas with you. Then, choose three or four of these ideas to analyze. Go with your intuition about which choices seem the most feasible and likely to meet your objectives. In our example, your list might include hiring new employees, hiring contractors, and redistributing the workload. Your alternatives should also include the status quo: What will happen if you make no change?

Next, gather information about each alternative so that you can compare the pros and cons and select the best possible solution. This isn't an exact science, so you'll have to rely on your intuition and best judgment, as well as input from others. Remember to document your rationale so you can explain it to others later.

Let's assume that in our example, you gather information, compare alternatives, and decide that hiring new employees is, indeed, the best choice. So you've considered a number of alternatives and have a preferred solution. Now you're ready to go the boss with it — right?

Not quite. Consider your solution preliminary until you've thoroughly examined the alternative you've chosen. Are there any risks associated with it? And will there be any problems implementing it?

Returning to our example, one risk you might face is that sales could slip in the typically slower summer months, causing you to run out of work for your full-time employees. One way you might mitigate this risk is to hire employees on a trial basis. This approach would give you the double advantage of seeing if sales continue to increase and also if the employees meet your expectations.

If you're satisfied that you can mitigate the risks associated with your top choice, it's time to create a high-level implementation plan. Identify how you will achieve your goals and who will be accountable for each major milestone. Spell out when you expect to see benefits. The projections in your implementation plan will help you "sell" your case to decision makers.

Speaking of "selling" your case, now that you've done all this work, it is finally time to go to the boss — right?

Yes! You've reached step three in the process, presenting your final recommendation to key stakeholders. To make sure you make a compelling case to your boss and other decision makers, take time to decide exactly what you're going to say and how you're going to say it. Even if you decide (or are required) to submit a written report, consider making a presentation as well.

Prepare by thinking about what your audience wants — and what you want them to do. Then consider using the process you followed to develop your case as a framework for your presentation. Start with your opportunity statement. Then briefly outline the three or four alternatives you considered, a summary of costs and benefits, your initial recommendation, and why you chose it. Follow with a presentation of the risks and how you suggest mitigating them, as well as the high-level milestones from your implementation plan. Close with a reiteration of your opportunity statement and how your recommendation will benefit the organization.

You may feel tempted to explain every detail of your work. Resist that urge. In presenting your case, you want to deliver a short, focused sales pitch, not a lengthy, detailed lecture. Leave the rich detail for the written business case. But have your backup information with you so that you can show it if anyone asks.

Does developing a business case seem like a lot of work? Yes, it does.

But is the effort worth it? Absolutely. Developing your business case will not only help you make better decisions, but also sell your solutions to decision makers. And who doesn't want to make better choices and get approval for them?

For a more in-depth look at how to develop a compelling business case, see the Harvard ManageMentor topic Business Case Development.