I had an energetic conversation during a workshop session recently – it was one of those moments when ideas are just flowing. We were talking about the very low success rate of new projects inside established firms (it’s about 1 in 5), and the role that the “business case” plays in the success or demise of the project.
Our conversation turned to why it is that this “business case” is such a villain. Why does it cast fear in the heart of some of our best innovators and then appear in so many post mortems as the reason for the lack of a project’s success?
Conversely, why are so many potentially valuable projects never brought forward? What ties the hands of those creatives in our firms and prevents them from not bringing their best?
As we challenged one another, there were three thought streams that emerged, each of which plays a big part in unpacking the drama and mystery around getting business cases in place for strategic work in existing firms. As we’ll explore below, each of these thought streams help us to get to a deeper truth that provides much-needed insight into how we might move that “success” needle in our firms.
Thought Stream #1: We Hold the Business Case to a Very High Standard
As we unpacked this, it became really clear that the standard of comparison inside the established firm is the current business model. Most of the leaders in the firm were not present for the establishment phase of the current business, and are hungry to have the new project get on par with a mature, built-out business. The questions that a business case are subject to are typically at a level of detail that early-stage work simply cannot answer.
Insight: Many, many projects are crushed prematurely when the project participants are asked to project a good hypothesis with fictional certainty and detail.
Result: The firm is deprived of significant growth from two sources. The first is prematurely killing good work in the pipeline, and the second is that many good hypotheses will stay hidden when potential growth leaders see “what really happens.”
Thought Stream #2: We Each Have a Different View of What a Business Case is
The audience for an internal business case is quite diverse.
For example, at a high level:
- CEO’s will be looking for how this investment benefits the firm and its shareholders
- CFO’s are looking for good fiscal risk management and stewardship. They are also looking for a way to place this context with the other financial priorities of the firm
- CMO’s are looking for how this creates new addressable markets without tarnishing the brand
- Senior Go-to-Market officers need to see that they can sell it with the skills of the people they have
- Supply chain executives want to know if they can build or create it and if their partners and distribution channels can support it
- Chief Counsel wants to know how much risk is involved
Insight: There are many audiences with unique communication and thinking styles in the firm that need to review the business case. We need to construct our work to be consumed by multiple stakeholders to develop a consistent, integrated view.
Result: The common outcome of the diverse audience consuming a document that doesn’t speak to their needs lies in two extremes. The first, is they construct their own view that is based on their experience and prejudices – both positive and negative. The second is a flurry of detailed questions that push the team to establish detailed extrapolations that later prove to be inaccurate. In either case, the outcome diffuses understanding rather than consolidate it.
Thought Stream #3: We See it as Static When in Fact it’s Highly Dynamic
The leaders I was talking with confirmed that the creation of business cases in their firms was delegated to highly-specialized analysts who were charged with the creation of a document that outlined the investment, insight, and benefits of the project. Once completed, these documents were viewed as static. What is missing from this approach is the truth that a reach-out project starts with a set of facts and lots of assumptions. Adaptive firms are skilled in doing structured learning to remove the fiction.
Insight : Mature operational firms are set up to rank items, debate their merits and make go/no-go decisions. This pushes business cases to be a singular event, which sets the stage for investment.
Result: This sets up a “one and done” decision framework. Strong business cases are built, and in their early stages create many more questions than answers. With an early stage go/non go call, the firm misses out on growing the learning capacity that is needed to validate intuition and insight.
Bottom Line
Healthy adaptive firms use the business case as a tool to sequentially and collaboratively capture the work of cross-functional leaders and subject matter experts over the arc of development.
By building the vision and fact base in layers, they develop powerful insights and coalitions that create momentum for the firm.
If you’d like to talk more about how this all works in a powerful framework, please reach out to me at 847-651-1014 or use this link to set up a 20-minute call.
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