{"id":8690,"date":"2023-10-04T20:27:37","date_gmt":"2023-10-05T00:27:37","guid":{"rendered":"https:\/\/www.business-case-analysis.com\/blog\/?p=8690"},"modified":"2023-10-05T20:52:49","modified_gmt":"2023-10-06T00:52:49","slug":"declaw-the-cat","status":"publish","type":"post","link":"https:\/\/www.business-case-analysis.com\/blog\/declaw-the-cat\/","title":{"rendered":"Your Business Case Critic: De-Clawing the Cat"},"content":{"rendered":"

Captain’s Log, Entry 8180.3<\/strong>\u2014Prepare for the Worst\u2014the serious critic. If you don’t want nasty surprises from the hostile business case critic at your own case review then don’t surprise your audience!<\/em><\/p>\n

There are some things you just do not want to hear at your business case review. You are trying, after all, to build confidence that supporting your proposal is a wise business decision.<\/p>\n

At your case review, however, certain remarks from business-case critics can dismantle that confidence\u2014if you are not ready for them. One hard-hitting question from a devious skeptic can undermine the credibility you work so hard to build\u2014unless you know in advance how to turn it to your advantage.<\/p>\n

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Who is the\u00a0 Business Case Critic?<\/h3>\n

We hear from participants in our Master Class Seminars<\/a> about some of the painful comments they have received, like these:<\/p>\n

“You left out important cost items.”<\/p>\n

“Your case depends on “soft” benefits.”<\/p>\n

“The results stand on risky assumptions.”<\/p>\n

Not long ago I met a product manager at a European automobile parts manufacturer who had just had a product proposal turned down by the Management Review Committee. One especially vocal reviewer, the Financial Controller, delivered comments like these at the review.<\/p>\n

While other members of the group simply asked questions and probed, the Controller offered skeptical\u00a0judgment<\/em>. Those skeptical words, from that source, no doubt undermined business case credibility with the rest of the Committee. The Controller, in other words, played the “business case critic” role effectively.\u00a0 After a short discussion, the VP who chaired the Committee delivered the verdict:<\/p>\n

“Your business case does not convince us that we will in fact see the results you predict.”<\/p><\/blockquote>\n

The product manager asked me: “Where is the problem? Was it a weak case? Did I fail to communicate effectively? On the other hand, did unfair criticism shoot me down?<\/p>\n

Getting answers was important because his “second-chance” presentation was coming in three weeks. The product manager’s best course now was not<\/em> to re-write the business case. Instead, the best move now was to anticipate<\/em> each kind of attack\u2014just like the Chess Master who expects<\/em>\u00a0opponents to make the best possible moves. In fact, by addressing the Controller’s comments, we dealt with all three issues at the same time: content, communication, and criticism.<\/p>\n

Criticism 1: You Left Out Important Cost Items<\/h3>\n

We met with the Controller himself to redesign the cost model<\/a> for the case. Our purpose at this meeting was not to re-visit the costing analysis calculations, but instead, to agree with the critic on which cost categories belong in the case, which do not, and how to summarize the rules for including or excluding cost items. The purpose, in other words, was to affirm agreement on “costing” principles and cost model validity. The Controller asked for several adjustments to the draft cost model we presented him, and then agreed\u2014two weeks before the next review\u2014that the cost model for this case includes every relevant cost category.<\/p>\n

It is always good practice to agree on case design elements with your reviewers or stakeholders before you build the case and not after. Here, the business case critic himself contributed to cost model design. This approach leaves very little room for critical surprises on the next review day.<\/p>\n

Criticism 2: Your Case Depends On Soft Benefits<\/h3>\n

Try using the term “soft benefits” during a business case review, and just watch the room temperature drop. The term “soft benefits” has a way of cooling off support for the case.\u00a0 The word “soft” implies that benefits are either unlikely or that no one knows how to assign financial value to them. Some people, in fact, argue that only “hard” benefits such as “cost savings” and “increased revenues” belong in the financial case.<\/p>\n

A more practical approach, however, is to view every tangible contribution to an essential business goal as a “business benefit” that belongs in the business case. Note that “tangible” means “touchable,” not necessarily “financial”.\u00a0 Evidence for the benefit may consist of changes to KPIs, or it may consist of a financial impact as incoming cash flow or cost savings. Either way, outcomes that help meet significant business goals are genuine business benefits (for more on this rationale, see “Business Benefits<\/a>“).<\/p>\n

The product manager’s proposal for product design would very likely improve customer satisfaction KPIs, an important business goal. The Controller had objected especially to the estimated financial value for that benefit. We sat down with him, again, and went through our strategy for benefits:<\/p>\n