How to Make the Business Case for Change
McKinsey & Company’s research suggests that 70 percent of change efforts fall short of their objectives or fail altogether. That creates a challenge for you as a leader to obtain approval for change initiatives when you are not the ultimate decision-maker.
Increase the likelihood of getting approval from your superiors by making a strong business case for your change proposal. Here are nine elements to consider when building your case.
- Define the problem. Most change initiatives are designed to solve problems. Create a clear and succinct description of the problem to attract attention. For example, a healthcare provider might define a patient no-show problem as “One-sixth of our patients don’t show up for their appointments due to the lack of an automated reminder system.”
- Explain the implications. Outline the consequences of the problem in the immediate as well as long term. Help your superiors envision the repercussions of not making a change. Describe the current approach to the issue as a band-aid. As I often tell coaching clients, “Pull on the band-aid and let them feel the pain.”
- Offer potential solutions. Show that you’ve done your due diligence in identifying multiple solutions to the problem. Provide a summary of the alternatives you explored. Consider creating a chart that compares the critical elements of each option.
- Present a recommendation. Offer your proposed solution and a high-level description of how it will be implemented. Explain the most significant advantages of your proposal over other options. Anticipate the question “How much will this cost?” and outline the financial investment.
- Identify resources. Another question that’s sure to arise is, “How are we going to pay for this?” Identify potential funding sources for both upfront and ongoing costs. Determine the budget lines that will pay for your proposal or describe the financing for it. If future cost savings will fund the initiative, show the payback calculation.
- Provide a cost-benefit analysis. Include nonfinancial costs and benefits along with the financial ones. For instance, using the healthcare example above, increased patient satisfaction and retention would be among the benefits you should present.
- Acknowledge potential risks. Rarely are change initiatives without risk, as we saw from McKinsey’s research. Leaders are naturally suspect of proposals that include all benefits without acknowledging the potential for failure or setbacks. Be transparent about those risks.
- Include criteria for measurement. This step assures your superiors that you have a long view of success. Describe how you will measure success and determine whether mid-course adjustments are necessary along the way.
- Request a decision. A clear ask speeds the decision-making process. A lack of clarity slows it down. Prepare your request in the form of a question that compels a prompt response or at least advances the discussion.
Learn to build a business case for your change initiatives. Doing so will improve your odds of gaining approval for your recommendations. It will also position you for advancement to higher leadership levels in your organization.
This article was first published on the LeadChange blog.