There is a magic document that is almost always associated with practically every business decision. It is a document filled with mystical powers, such as the ability to foretell the future. It is able to shape the way things happen in the present. And even when things go wrong, it has the power to provide a universal get-out-of-jail-free card.
I'm referring, of course, to the Business Case, that tool much loved by MBAs and practically everyone else.
I was put in mind of this as a result of a conversation with one of the people in my team yesterday. He was wondering where he could get examples of some excellent business cases, This, of course, led us to a discussion of what actually constitutes such a document.
Actually, the business case document is an exercise in the suspension of disbelief, rather like you see on those reality talent shows. Thousand and thousands of applicants who think they can sing, and only one winner. All judged by three or four successful industry professionals.
Just where did they get all that time?
The business case is similar. It makes predictions about specific future states, when the rest of the time, we accept that such predictions are hard or impossible. But in he context of an official business case document, this kind of crystal ball gazing is not only accepted, it is expected. About the only feedback one gets with respect to this oracular vision is “hmmm, those numbers look high to me”, or “um, don't those numbers seem low to you?”.
This illustrates another powerful effect this fascinating document has. It can infect anyone who reads it with the ability to read the future as well.
It is hardly surprising, really, that most of the time the actual set of circumstances predicted in any given business case do not come to pass. I've yet to see such a document that was a completely accurate reflection of the way something actually got done, once all the money was approved. That's because during implementation, you learn a lot which you didn't know when you make your forecasts and all this new information changes the shape of the thing you're doing.
During the process of building something out, it is not unusual to see it morph completely. In the start-up community, in fact, people are starting to offer advice which reflects this: you might have to try two or three business models before you find one that works.
Pity the poor investors who made their funding decisions based on the first business plan (a business case, in everything but name).
All this brings me to the main point I want to make on business cases. Since they don't usually reflect the actual reality of what gets implemented, why do we persist in creating them?
The answer is obvious when you think about it. A business case is a sales document. It is a collection of statements about some future possibilities framed in a such a way that it attracts the interest of those with resources to invest.
What are stakeholders looking for in a business case?
They want to understand the value proposition to them, and how much it will cost. What will they look like if it is successful? In the overall scheme of things, what are the implications for the organisation of which they are a part? And, in the end, what assurances do they have that in the event of a failure, they won't go down with it?
Let me put that differently: even if it is only subconsciously, budget holders make an assessment of the business case in terms of how well they think the document might work as that get-out-of-jail-free card when it is later found that the investment didn't go the way it was expected.
Accepting the true purpose of the business case lets you target the messages within it much more effectively. A focus on benefits rather than costs is helpful. Creating custom business cases for specific audiences can be powerful.
And, whilst you need the numbers to be there, they themselves don't communicate the actual message one needs: this is the investment opportunity you've been waiting for, and it is the most attractive you have available at present.
It is impossible to do without a fully featured business case for any significant decision, since we've all been fully conditioned to expect the document these days. Since we're stuck with writing them anyway, it makes a great deal of sense to optimse the business case for the real audience need.