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business leadership Random Thoughts

The case about business cases

I honestly don’t feel the need to create business cases unless you’re selling a product or service to a potential or existing client. They would need that kind of documentation in addition to references and use cases to be able to sell your brand internally. I, however, would only invest time in building a case after I’m certain that I have a genuine shot at winning the business. And how would I know it? It’s pretty simple — your key point(s) of contacts would have introduced you to the decision makers. The ones who have the power to say a “yes” and not just a “no.” If these people don’t know you, back off, as you will end up wasting a boatload of your time.

But I digress, my main concern was around the practice of having to create business cases for each and every internal initiative in an organisation. Why do you need them? Particularly if you aren’t a Fortune 100 company? If “justification” is the answer then I’m afraid we, the company, won’t get any further in terms of growth. Why? Because we’re probably spending countless hours seeking justification for each and every aspect that pertains to price instead of focusing on the cost to the company.

For example’s sake, let’s assume an existing employee seeks a $5,000 annual raise and you ask him to build a business case only to reject it because you found it weak will cost you more than $30,000 in the long term. Here’s how? He’ll quit his job and you will have to replace him with an equally talented candidate who is at least $15,000 per annum pricier. Add another $15,000 for recruitment related costs — digital ads, referral bonuses, candidate shortlisting, coordinating assessments, interviews, the email tennis grand slams, and whatnot. It’s exhausting!

The worst part is that you were eager to seek a business case for a $5,000 raise but didn’t give a hoot to let him go and spend $30,000 to bring in a replacement! No documentation needed! What does it say about your business strategy? I’d say it’s pretty dumb. If I won’t someone else sure will and I hope it’s not one of your employees.

The above example isn’t just for people but also software. It’s irritating to jump through the hoops to enable access for a team member to an application that costs a measly $6/month. I knew one organisation that would have me create a business case if a team member of mine needed access. I chose otherwise and asked my teammate to track data using Microsoft Excel. He has become a wizard of sorts with that application as of today.

Listen, I’m not suggesting business cases should be abandoned internally. There’s a time and place for that. All I’m imploring here is that there’s little value in majoring in the minor things. A $6 dollar or a $2,000 per month investment in software or people is a no-brainer for a multi-million dollar company. Especially when they know it’s going to make everyone quite happy, which, as we all know, has an indirect impact of overall productivity and hence, the bottomline.

Why invest so much time and energy in something that’s so obvious? If it were up to me, I would propose a simpler model. Something in the lines of:

  1. Is the business profitable? If yes, got to step 2. If not, we’re not having this discussion.
  2. Would the profits take care of the ensuing expense? If yes, go to step 3. If not, let us manage our expectations and readjust the numbers.
  3. What would the impact be if we go ahead with the proposal? If it’s positive. Stop wasting time and approve it. If it’s less than impactful, let’s talk.

I know, I know, it’s overly simplistic but I honestly wouldn’t have it otherwise. Because complexity doesn’t make sense particularly if you’re a small or medium-sized company. Having this discussion is bad enough. But let me share an example of my friend Karen recently ended a relationship with a client she has been working full-time for the past 5 years.

Karen wasn’t just a reliable resource but a trusted advisor in the copywriting department. Last month she sent in a request to raise her rates from $88 to $90/hour as she hasn’t ever asked for a raise and felt it was time to. Her boss asked her to create a business case justifying the cost. Karen was taken aback and chose to decline and move on. Why? Two things, (a) she wasn’t getting paid to create a business case, and (b) nobody shared a business case for her to stay at $57 an hour.

I spoke to the boss this past week and he mentioned having a rough month that started with losing Karen and then hunting for an equally talented copywriter, which he couldn’t’ find. So, he had to settle for the next best option at $125/hour. Ouch! Was it worth fighting over just two bucks? I don’t think so. Yes, organisations do just that!

The crux is this — keep it simple as over-analyzing will have you lose both people and trust in the long run. It’s funny how this unbelievably effective strategic tool that works so well externally ends up turning a lot of things down south.