Right now, our mission is to provide practical strategies and timely information to protect and prepare you as we slide into a global recession. With that in mind 10 Recession-Busting Solutions for advisors, business owners, and CFOs are here to help you be successful in your task.

1. Re-Evaluate Your Business Model the way you work has to change, make it a change for the better!

`The Enterprise Business Model`

It is Your Time for Success…

Improving the quality of systems is necessary to accelerate with impact organisations in the 21^st century. The competition for customers is getting fierce. Customers want and expect much more from company personnel and their systems. This publication will help you to improve your skills in empowering people to deliver quality service excellence by using a `Enterprise Business Model`  to raise the `bottom-line`.

This publication will help you understand how an `Enterprise Business Model` can affect your business globally and also impact an increase in the `bottom-line`.

Businesses that invest in `people and systems` will `win`, because they care more than other organisations. Each company should care about its personnel and business systems.  The world is about dedication to the people and business models environment, since it is people and business models that make companies work, technology only helps people and the business models carry out their job more efficiently.

“Anything in life is possible as long as you have the passion to be successful”

• Colin Thompson

“In the last two weeks I’ve seen many business owners make panicked decisions and rupture relationships that took years to build.”

In the past few weeks, you’ll probably have had to heavily revise how your business operates, to fit with the global change in circumstances. But change doesn’t have to be a bad thing. Take some time to re-evaluate your business model, really get to the heart of why you do what you do, and ask yourself if there are ways that you can do it better.

Are there changes you’ve made recently that you’ll want to make permanent once things start picking up? Has your team learned to collaborate in new ways that will serve you for the better going forward? Maybe you’ve had to shorten your turnaround time, or started offering new delivery options. Good things can come from bad times, if decisions are made with a cool head.

2. Ensure Your Team is Optimised and Ready

Take care of your team, so they can take care of business. Health and safety doesn’t just mean letting everyone in the office know where the fire extinguisher is stashed. Keeping your team healthy and motivated is key to the survival of your business. Some of your employees will handle the disruption better than others, and should be supported mentally, physically, and emotionally through this time. 

If you have any hard decisions to make to keep the business afloat, make them early. If you have people willing to step up into leadership roles, let them shine. The more your team is on your side, the better your chances for success. 

3. Get Time With Your Accountant or Advisor 

Their expertise might be the difference between sink or swim. There are a number of services your accountant or advisor could offer you right now that could make a real difference. First and foremost, if you’re a business owner, you’re going to need a cash flow forecast. If you’re an accountant, you should be providing one to every client. There’s no point getting through the worst of the slump, only to find that you’ve run out of money. 

Business owners: ask your accountant for help with tax planning, government packages, and compliance and relief strategies. Chances are, this isn’t the first recession they’ve worked through, and they might have game-changing insights that will see you thriving.

4. Understand Government Assistance Schemes 

Most governments are offering financial aid to get local businesses through these stormy waters. Not all of it will be applicable to you, but make sure you conduct a thorough investigation, so you don’t miss out. If possible, ask your accountant/advisor for help with research and applications.

5. Constructive Communication With Customers

Humanity is more important now than ever. Everyone could use a friendly face and voice from outside their quarantine bubble right now. But it’s not just about sales—it’s about connection. Reconnect, reassure, and really listen to what your customers are saying. Relationships rekindled under duress are likely to last well beyond bad times.

Be careful with your communication—quality, not quantity, is key. Make sure that your messaging is empathetic and not tone-deaf, but also, try not to hammer your customer base with crisis comms. We all know things are getting bad out there—how can you help make their day better?

6. Talk to Your Bank and Stakeholders

If necessary, reconfigure and renegotiate. What debt options are they offering? Can they help you with governmental schemes? Are they willing to renegotiate existing debt, and offer you better rates? What advisory services can they provide? Are they a source of capital now, or will they be in the future? What expertise can they offer?

Keep the bank in the loop, so they can help you with things like overdraft availability and other measures. Stay on their radar.  

7. Dive Into Your Numbers

Use them as a guide going forward. As mentioned earlier, you’ll need a cash flow forecast, and a budget. Take your data and all available factors, and use it to plan scenarios: what good, bad, and ugly scenarios are possible in the future?

Your numbers will illuminate both ‘flab’ and ‘muscle’. If you need to trim the fat, now’s a good time to do so, but don’t throw out useful subscriptions and assets with all the nice-to-haves. Keep what’s useful, and it’ll serve you well in the long run. 

8. Update Strategy and Direction

Get your business ready for the new normal. Remember, this is a marathon, not a sprint. The way forward might be clear to you right now, but you need to be thinking about how the decisions you’re making will impact your business in the future. Create a chart of 30/60/90 day priorities and actions, and make sure there’s a balance between urgency and intent.

Put your customers at the heart of your decision making. What’s the best service you offer right now, and are you delivering it in a way that’s accessible to your base?

Take a moment to think about long term goals. What are the top three objectives for the next one-three years? Maybe it’s all about survival right now, but recessions don’t last forever. How will you come out on top?

9. Double Your Support Networks

Reach out to old friends, and make new ones. In tough times, the prepared, proactive and fearless often move quickly from flight/survive, to fight/thrive. These individuals seek new or renewed relationships, networks, and sources of advice that will sustain and guide them on the journey ahead. 

Come out of this time with more connections that you had going in. Make sure you give as much as you take, and reap the rewards of beneficial relationships that will boost not only your business, but your own profile, as well as your wellbeing. Find the people who can support you through tough times, and be that person for others. No man is an island, especially not in the age of technology. 

10. Manage Yourself 

Take care of your physical, mental, and emotional health. If you’re not operating at your best, your team, your family, and your business won’t be able to either. Show compassion and empathy for those around you, but don’t forget to save some for yourself. Stay realistic, avoid burn-out, take some time out to recharge so you remain positive and effective. 

Learn to shut out the 24-hour news cycle, and focus in on what matters. Eliminate sources of negativity from your life, whether that’s people, companies, or news outlets, and focus on the good. In bad times, we often see humanity at its best, and now is no different. Look for the positive, bring it into your life, and share it with others. After all, we’re all on this journey together.

Solutions and Strategy Tips for Success

To help ensure that your business/personal adventure is a successful and profitable one, here are some tips and strategies to make your efforts more fulfilling and focused.

Build a Foundation Based on Your Core Values.
What’s important to you? What are the drivers that get out of bed each day to go to work for yourself? Look to your core values for some clues. Our core values shape how we operate in the world both personally and professionally. The more aligned your work is with these core values, the more satisfying your business will be and the less like work it will feel.

Get Clear on Your Commitment.
What is your vision and mission for your company and yourself? What impact do you want to have on your community and the world? How do you want to achieve your vision? The more you can refine your vision, the easier it will be to set your goals and objectives along the way.

Create Your Plan.
Writing a business/personal plan isn’t just a nice exercise to do, it’s a road map for building your company and your life. It’s a working document to help guide you, stay true to your vision and help you establish the mile markers along the way. It should entail both your short-term and long-term goals for your company and include your plans for the internal growth of your organisation and the external growth of your business. Do not let it gather dust, review and update it regularly.

Determine Your Unique Selling Proposition (USP).
Do your research — what are your closest competitors doing? Then look to see how you can provide your services better, smarter or faster than your competition. This will help you to stand out from the crowd. Use your uniqueness to your advantage — quirks and all!

Build Your Marketing Kit.
Take your USP and use it to create a set of effective marketing materials. To get you started, you’ll need a business card, an “audio logo or 30-second commercial” to briefly describe your business, an executive summary of who you work with and what you provide, and even a small website to get your brand out onto the web. 

Establish a Marketing Strategy.
Now that you’ve got some tools to get started with, it’s vital that you identify the 2-3 different marketing tactics you can do to help grow your business. This can include but isn’t limited to: networking, advertising, online sales, creating a newsletter, speaking engagements, podcasting, writing articles to get published or even writing your own book. Whatever tactics you choose they should all point your potential clients into your sales funnel. The more closely each of these tactics is tied into the others, the more successful your marketing campaign will be.

Create Your Team.
Yes, you are super human AND, having the support of different people will help you achieve your goals more quickly than you will on your own. Does this mean you have to hire a bunch of employees? No, you can create your team in many ways using full-time or part-time help. Consider hiring consultants such as a bookkeeper, FCA/CPA or web designer to help you with areas that might not be your forte. The idea is to work from your strengths and find the help you need in other areas that don’t fall into your sweet spot of skills and talent.

Accountability is Key.
Whether it’s to your staff, your board of advisors or your coach, having someone outside of your head (and preferably not your spouse!) to help you stay in action around your plans and goals is extremely helpful. Establish regular check-in calls or meetings to review where you’re at, where you might be off course and what you need to do to get back on track.

That’s why a coach is so important.

Create Raving Fans.
The least expensive way to attract a new customer is through referrals. And the best way to get referrals is to create raving fans! Under promise and over deliver every time and your clients will be singing your praises to their friends and colleagues. Think of it like a pump that needs to be primed — it takes some work initially to get things moving (through your marketing efforts and delivering great products or services to your clients) but as your reputation grows, you’re business will start to flow more easily!

What You Focus On Comes True.
Focus on what you want to create and achieve, not what you’re fearful of. Fear can easily generate internal negative self-talk or limiting beliefs that get in your way and get you stopped. The more you focus on these negative perspectives the more evidence you’ll find to support your beliefs. Instead, focus your time, energy and actions on the areas that will create your success.

Find the Balance.
Go back to those core values and remember what’s important. I’m guessing that working 24-7 is not your ideal lifestyle. Be sure to take time out for the other aspects that make up your version of a balanced life – time with friends, family, hobbies and exercise. “Down time” is vitally important to recharge your batteries, clear out the brain fog and rest your body.

Celebrate Your Successes!
It’s easy to take note of what hasn’t been checked off your list, what’s missing, or what’s not completed. This can send you into a negative frame of mind in a nanosecond if you’re not careful. Be sure to take time at the end of each day to celebrate your successes no matter how big or small they may seem. By focusing on what you’re grateful for, you’ll raise your energy level, clear out some of the internal noise and go to sleep with a smile on your face.

Quotes

“What a wonderful life I’ve had! I only wish I’d realized it
sooner.”
     — Colette

“There are only two ways to live your life. One is as though
nothing is a miracle. The other is as though everything is a
miracle.”
     — Albert Einstein

“The future belongs to those who believe in their dreams.”
     —  Eleanor Roosevelt

What are your plans?

Other very useful publications to help with your success;

`How to Learn, Lead and Grow as a Champion`

https://www.barnesandnoble.com/w/how-to-learn-lead-and-grow-as-a-champion-dr-colin-thompson/1144506390?ean=2940185999530

Achieving Business and Personal Excellence

Learning – Leading – Growing – Winning Together = Success

Rising to the Challenge

Finding Ways to Grow and Thrive – take on this publication will lead to success;

`Blending the Right Solution = Success`

THE ROAD TO SUCCESS

Your Business and Personal Growth

https://www.barnesandnoble.com/w/books/1143973266?ean=2940185969373&hConversionEventId=AQEAAZQF2gAmdjYwMDAwMDE4YS0yMmM0LTQ0YTgtOGQ5Yi05ZjQzNGI1YzNhZTjaACRkMD

“An Investment in Learning, gaining Knowledge and Skills Pays the Best Interest for You”

Colin Thompson

The Strategy Execution Duality

Execution has enjoyed an impressive reputation in the last few years under the banner that any strategy is worthless if not executed. While this assertion is tautologically undeniable, it is also true that a flawed strategy execution can have unappealing consequences. New Coke or the Betamax video format come to mind.

From Detachment to Duality

One of the best known proponents of the execution point of view is Larry Bossidy, author of the bestselling book Execution: The Discipline of Getting Things Done, with the basic premise that “Strategies most often fail because they aren’t well executed.” He sees strategy & execution as two separate processes.

Bossidy’s view was criticized by Roger Martin, who claimed that separating strategy from execution can be damaging. In an HBR article (The Execution Trap), Martin advances the idea of “Strategy as a Choice Cascade” where choices flow from top to bottom on a set of rapids each representing a choice point.

In his own example, the CEO’s decision to invest heavily in the U.S. retail banking industry, prompts the President to ponder winning strategies to win in U.S. retail banking. By choosing superior customer service, the President challenges the EVP of branch operations to review customer service capabilities and, in this example, going for easing customer interaction and triggering the Branch Manager to develop an approach for hiring and training CSR who in turn ponder how to ease customer service on specific cases.

Martin’s cascade metaphor bridges the strategy-execution gap by empowering employees at all levels of the organization to implement their own local strategy within the constraints of their immediate upper level, turning it into a more organic process. The advantage of this approach is that employees become participants in the strategic process, developing a sense of ownership, contributing their own expertise and knowledge of the local environment.

While there is feedback built at every choice point, there is not an explicit upward communication mechanism in Martin’s model that allows the CEO to evaluate the effectiveness of the strategy at each level. As long as the top level strategy is appropriate and noise through the system is mild enough to not interfere with the chain of messages, the organic mechanism should be effective.

However, in many cases, strategies generated at given choice points – including the top level – can produce perverse results. In Martin’s example it is easy to imagine a scenario where the strategy to grow presence in the U.S. retail banking industry is realized at the cost of declining stock performance. An outcome hardly identified with success. Points of failure can be found anywhere from the top level strategy – the US market might not support a new entrant – to any choice point in the cascade such as an inefficient funding strategy or flawed marketing campaign.

Closing the Loop on Strategy Execution

A solution is to equip this organic strategy with a feedback loop that conveys information upward to be proactively analyzed from any given decision point. The first step in building such a loop is to define a measure of the strategy’s ultimate goal. In Martin’s example the stated top strategy execution is to invest in the U.S. retail market, but the ultimate goal is presumably aligned to value as represented by ROI for example.

The next step is to define metrics for the next level down that support ROI. Ideally, the corresponding set of metrics can be mathematically linked to ROI, but indirect links can work as well. The idea is that the cascading strategies and its metrics should drive our ultimate goal. If ROI is not increasing as expected, management should proactively look at downstream strategies and metrics to identify opportunities, and to understand underlying relationships. This process should be replicated at each decision point.

Furthermore, the construct helps continuously test the validity of the assumptions and metrics at each level. Say that ROI is on the rise, but at some decision point everything looks grim. Before trying to “improve” the local process, the system’s internal logic calls to question the relationship of the local strategy to the ultimate goal and the soundness of its metrics and assumed relationships. It might not be necessary to fix the process at all, but simply to choose better metrics. A similar logic applies to a strategy that is failing to deliver while the underlying components seem to be working fine. We need to review and revise a few assumptions, including missing intermediate strategies along with their network effects.

The cascading approach provides an organic means to develop and execute strategy. The feedback loop allows management to continuously learn and adapt. The purpose of the system goes well beyond accountability, it is about collectively reaching a well-defined goal and everything is on the table.

About the author: Jorge Zazueta helps leaders solve business problems and achieve sustained performance improvement. He does so by partnering with the business and embracing its goals as his own.Before founding Zazueta & Company, Jorge Zazueta spent two years as a Principal in CSC’s Strategic Services Group and five years with IBM Global Business Services with their Strategy and Transformation Group; seven years with Cummins, Inc. in Columbus, Indiana; along with brief stints with Cooper Standard Automotive in Auburn and ThyssenKrupp Mexinox in Mexico. He is well trained in business process improvement methodologies, including Six Sigma.Jorge achieved both an MBA and an M.S.S.M. from the Kelley School of Business at Indiana University in Bloomington, and an MA in Mathematics from the University of North Carolina in Wilmington.

View Jorge’s short bio

Many of us measure success from a purely business perspective. We place value on aspects such as turnover, profit/loss, growth, customers, clients, sales, the list is endless. Often we fail to acknowledge value from other areas of our lives, and as such our tight focus on one aspect, often business can see us scrutinizing the wrong things.

Measuring the Things that Matter

Although you are ambitious and business-driven, taking some time to look at other aspects of your life can be of use to you. In so doing, you will be able to use it to motivate yourself through the bad times that may beseech your career at some point.

Moreover, success in one area of your life tends to lead to success in another.

Here are some aspects of your life which give value, but you may not yet realize it:

Health

If you have your health you are in a great position. You have nothing holding you back from achieving your goals and ambitions. If you’re not doing so already, try and find some time to do a little exercise. This not only makes you feel physically better but it can stimulate ideas and get the creative juices flowing.

Family

If you have a great family setup then you are in a good, and many would argue a fortunate and blessed position. Strong family relationships are the stuff of happiness, and few would not value happiness.

If your family is doing well, then this gives you a platform to do well in your work. It is not just having family support, but a feeling of wellbeing and the satisfaction of contributing to a positive family setup. Should you be in this position, consider this to be your best success if you do not already.

Enjoyment

If we spend our lives without enjoyment and valuing these times, then we tend to become reclusive and not see value in anything we do. The fact is that you need your time if only to recover from the time you spend working and other duties outside of your work. Taking some time is great for your productivity.

Not Appreciating Holistic Value

As a business consultant, I’m often asked to advise businesses that are not doing so well or want to improve. Time and again, I see owners and managers focusing on the wrong things. These things tend to make little or no business impact, and all they do is drink energy from hard-working executives. In many respects, I point out where the value lies to a business owner or a good Chairman and his or her executive management team, and this often transforms the fortunes of a company.

Taking time to appreciate what is meaningful from all aspects of your life will not only make you a happier person, but you will see where the true value lies in your professional life. This will make you more productive,  and give you a  more meaningful life.

Taking a Holistic View of Business Problems

Learn to value success

When businesses feel they are not fulfilling their potential or worse, experiencing problems, I am often called in to assess. What I normally find is not the problems with the business model, but business owners tend to focus on details that make little impact, and as such, the issues tend to become protracted, and in some circumstances contribute to the cause of their business problems.

Inside the Business Problem

The problem when you’re close to the business, especially as a business owner, is that it is all too easy to get so close you no longer have a holistic view. You may be focusing on one aspect that you feel is the cause, when actually addressing a different issue entirely will see a better result.

This often arises from being too business-focused. Constructive and productive thoughts about making your business do better, have turned into something bordering obsession. You could well be overthinking problems, and as such making business mistakes. That’s ok, we all make mistakes.

Seeing Issues from the Outside

Bringing in a fresh pair of eyes is often the best solution to his kind of scenario. A business-savvy person can take a look at the whole of the business, and cut through the ‘noise’. This is the value of consultants. We come in, we look at the business, determine what needs to be focused on. As a result business fortunes change for the better.

Learning to Value

I often advise my clients, business owners, for the most part, that learning to value is a great skill. It is important that we look at our whole lives and not just judge ourselves on one aspect. This is true of everything we do, including family, friends, and everything else that happens outside of our careers.

It is in essence the secret to having a meaningful life. This not only helps you maintain an objective focus on your business, but it also gives you confidence and strength,  which business owners need in abundance.

Running a successful business in my experience is not just about having focus, drive, and ambition, although these things are important, it is also about taking value and inspiration from your whole life. Once you embrace this not only will your business do better, but you will see considerable changes in your whole life.

If you feel your business is not doing so well or could do better.

It could be you simply need to take a step back and take a  holistic view. You’ll be surprised at the results.

#mfkassociates  #holisticview  #business #valuepropositions

#focus  #drive  #ambition #businessstrategy

#managementconsulting

Are you Afraid to say you don’t know?

Admitting Limitations Builds Trust with your Clients

Knowledge can Provide the Solution you Need

Knowledge Collaboration Brings Real Value to your Clients

Honesty the best  Policy

In an age of information, the most important asset is knowledge.  It is often said that if you have the information you have the upper hand, “the advantage”.

Well yes, sort of!

Isn’t it true that when we are asked about something, and if we do not actually know anything about it, we are tempted to bluff and say, “well yeah I know about that” and wish that we did know about it? What would happen if we admitted that we didn’t know much about a subject? Have you considered saying, “no I do not know”? Have you thought that could be of value to your clients?

Many of us are scared that we will be dropped as consultants should we admit that there is a topic or subject we know little about. This is a misconception, given that business relationships are based and built on trust. If we pretend we know little about the subject and our client discovers that, it could do a lot more damage than simply saying we don’t know.

In fact, the most “valuable” knowledge may sometimes be “not knowing”.

The Value in not Knowing

You need to admit the fact that you cannot know everything. This actually gives you credibility in the eyes of your clients, and as such it is perfectly all right to say, “I do not know this.”

However, it is even better and more valuable to add, “I do not know this but I could get you the best one who knows about it, or find out all about it me.” So it is not only important for consultants to be honest to our clients but also critical to collaborate and establish a close network with each other.

Through discovering what your client wants or bringing in someone that does, you offer real value in your service. This is positive for your clients and for your reputation as a consultant.

Collaboration can  Bring  Real Benefits to  your Clients

I meet with peers every once in awhile just to check and see how things are going at their end and to exchange information. It  gives me a chance to explore possibilities of future collaborations and to see their perspective of market trends.  Recently, I had one of these meetings with a very seasoned guru in his own right, one of the world’s top experts in hospitality consulting, Mr. Omer Isvan, the President of Servotel Corporation.

And while we were exchanging information we came to a point of acknowledging how important to be able to say “I do not know” to your client.

It is often thought that when a consultant is called upon a duty, he is supposed to come up with a miracle solution to save the situation. Often, we do by taking a holistic view of the whole case and adopting an approach accordingly to carefully assess the problem at hand. Then we are in a good position to provide a meaningful and valuable solution.

It would be great if we knew everything there is to know in the world, but this is not the reality. So sometimes saying, “I do not know”, could be much more valuable to your client than you could imagine. Knowing your limitations is valuable in itself.

An abundance of help and support is available out there. Just tell your client that “you do not know but you will find out or find the best person to ask”. This is a perfectly acceptable response, and you will ultimately be judged on results. It is ok not to know everything.

About the author: Mehmet Fatih Kara – Strategic Planning – Insightful thought leader who intelligently analyses all functional business areas and key market dynamics to deliver a clear strategic and operating model. Implements detailed action plans whilst identifying and capitalising upon new business opportunities.

View Mehmet’s short bio

Business Case analysis has become mandatory for important decision making and planning in government, business, and non-profit organisations everywhere. As a result, most case-building responsibilities now belong to those who are not “finance” people.

Everyone talks about the business case but surprisingly few people really know what that means.

That was true in the early 1900s, when business case analysis was born along with a new, developing discipline called finance. In those days, most people thought that business case analysis was “finance.” They thought the job of building and using case results should be left to financial specialists.

Lack of business case understanding is pervasive in 2016, as well, but there’s a difference: more than 90% of the professionals called on to produce or use case results today are people who do not practice finance for a living*. They generally have little or no financial background. They are product managers, project managers, agency directors, sales people, engineers, training consultants, and many other things that are not “Finance.” Now, it is they who are asked to build the case. We see many of these people in our `our business case seminars. ` They ask : What happened?

Fortunately, the difference between a strong case and a weak case has very little of to do with finance and everything to do with understanding a few simple elements of case design. To help understand why, consider briefly a “Top Five” list of common business case mistakes. For more on these issues, please see Business Case Essentials or the Business Case Guide. See details below.

Business Case Mistake 1: Thinking it’s “finance” and it’s a job for financial specialists

For those who build the case for decision support or planning, the challenge is not financial mathematics. The case may use a few simple financial metrics to communicate results, but the central challenge is deciding which costs and which benefits belong in the case in the first place. That is not finance. It s a matter of identifying all the important consequences of a proposed action, systematically and thoroughly.

Equipped with a few simple tools like the cost model and the “benefits rationale,” for instance, the task of ensuring that everything relevant comes into the case is straightforward and clear (it may be tedious at times, but it is straightforward and clear). See, for example, Business Case Essentials.

Business Case Mistake 2: Projecting income instead of cash flow

People may think that the primary result of the business case is a pro forma income statement. For the business case, however, the fundamental metric is cash flow, not income. Why?

First, many cases look into the consequences of actions that have little or nothing to do with producing income, especially in government or non-profit organizations. Beyond this, however, evaluating costs and benefits in terms of cash flow is a direct measure of each item’s worth. Income (or profit), on the other hand, measures less directly, because income reflects accounting conventions such as allocated costs, depreciation expense, and others. These factors “muddy the waters” when trying to measure consequences that actually follow from one action or another.

You may include a projected income figure besides the expected cash flow if decision makers want to know what the proposal will do for reported income per se. But cash flow, not income, is the clearest first answer to the basic question: Is this a good business decision?

Business Case Mistake 3: Omitting scenarios that help address the main question

We propose actions in order to make something better, trying to achieve cost savings, improved service quality, or increased sales revenues, for instance. A business case for an action aimed at any of these objectives needs at least two scenarios: a “proposal” scenario and a base case or “business as usual” scenario (sometimes the base case is called the “as is” scenario, or “current course and speed). Is the “business as usual” scenario really necessary?

The terms “savings,” “improved,” and “increase” are relative terms. We have to ask: Savings, relative to what? Improvement, relative to what? Increases over what? The “what” is a base case scenario that projects consequences if the proposal is not implemented. The base case scenario is indispensable if you want to know how much things will change.

Business Case Mistake 4: Using financial metrics blindly

The business case is not an exercise in finance (No. 1 above) but it may use a few simple financial metrics to help show the meaning of projected cash flow values. Some popular financial metrics include ROI (return on investment), IRR (internal rate of return), NPV (net present value), TCO (total cost of ownership) and PBP (payback period). I have heard senior managers say, for instance: “We’ll choose the investment with the better ROI,” or “We do not undertake any major spending unless there’s a payback period of 18 months or less.”

Should important business decisions really turn on one or two such measures?

Each financial metric has strong points: it tells you something useful about projected cash flows that might not be apparent from the cash flow figures themselves. However, each financial metric also has weak points: Each can mislead you when used blindly. Different metrics from the same projected cash flow statement, moreover, can point in different directions: one action has a high ROI but low NPV, the other action has a low ROI but high NPV. Which metric do you follow?

Also, each metric can be defined in several different ways. And, there is a lot of bad or just plain erroneous guidance coming from superficially respectable business case tools on the market. One vendor’s tool, for instance, tells you that IRR “…is cash flow received over a period of time vs. capital outlay.” You should know that that IRR has several definitions but that is not one of them. Following that kind of guidance will not enhance your credibility.

You do not need an MBA to build or use the business case. You do need a comfortable, definition-level understanding of a handful of `simple business measures`, and their strengths and weaknesses.

Business Case Mistake 5: Omitting important benefits because they are “soft benefits” or “intangible.”

There is a widespread belief that some benefits (positive contributions to meeting business objectives) of the action under analysis are second-class citizens. Unfortunately, real contributions to important objectives are sometimes labelled “soft,” or “intangible,” and omitted from the case.

“Soft” usually means “unlikely” or “cannot be measured in financial terms.” The term “intangible,” moreover, means there is “nothing to touch,” no evidence that the benefit exists. Many people use it when they really mean “non-financial.” If there is no objective measurable evidence that a benefit exists, then yes, it is intangible and does not belong in the case. However, when the organization has important business objectives having to do with customer satisfaction, branding, image, quality, safety, risk reduction, employee satisfaction, professionalism, or with other outcomes defined first in non financial terms, and when a proposed action contributes towards meeting these objectives, the contribution can be both important and tangible–even if it is non financial. Does your proposed action contribute to one of these objectives? If so, the benefit belongs in the case! (For more on bringing “soft” and “intangible” benefits into the business case, see our `Business Case Essentials`.

Remember that assigning financial value to benefits should be one of the last additions to the business case structure, not the first: if you can show in tangible terms that your proposal contributes to a business objective, the benefit is real.

Take action! Learn and practice proven 6D Business Case Framework !

Now go and be more successful.

About the Author Colin Thompson

Colin is a former successful Managing Director of Transactional/Document Manufacturing Plants, Document Management/Workflow Solutions companies and other organisations, former Group Chairman of the Academy for Chief Executives, Non-Executive Director, Mentor – RFU Leadership Academy, Mentor – Coventry University, Mentor – The Chartered Institute of Personnel and Development, author/writer Business Advice Section for IPEX, Graphic Display World, News USA, Graphic Start, plus many others globally, helping companies raise their `bottom-line` and `increase cash flow`. Plus, helping individuals to be successful in business and life in general. Author of several publications, research reports, guides, presentations, business and educational models on CD-ROM/Software/PDF and over 4000 articles/reports and 35 books published on business and educational subjects worldwide. Plus, International Speaker/Visiting University Professor. View Colin’s short bio

How global uncertainty drives business, commercial and pricing models?

With rising global uncertainties which have emerged over time, fueled by the recession of 2008 came new operating and business models including cloud computing. Business Processing Outsourcing (BPO) came in much earlier to that, perhaps due to the previous recession and evolution of technology.

The traditional model of customers having to bear huge upfront cost for implementing large scale transformation programs and subsequent operating costs over time became the not so preferred model. The need for elasticity and opex based models gained further momentum. Conversion of capex based pricing into opex based, where upfront costs are recovered over time on a certain basis such as a per Virtual Machine or per transaction with cost of capital built into could be one theme for large service providers who have the financial ability to do this, withstand, successfully deliver and reap the benefits of being a true transformation partner. Taking this further, a catalog based pricing with options to mix and match offerings is another within this. On top of this simulating across different volumes of transactions or other unit of measurement such as Virtual Machines meant a nightmare for the pricing modelers as well as procurement departments of the customers who need to look into the future and guesstimate the demand to support the service providers in building a model and quote. All this has given rise to something very interesting for the customer. Equally on the other side, customers need to provide some ramp up assurances over time to the service providers with a tight governance model on both sides, in order for the service provider to be able to meet commercial goals while unleashing the transformation.

Not all transformation programs run their full life and meet their stated objectives, many fall by the way side for so many different reasons that one could write a book. In such scenarios, the service provider should in fairness get compensated for upfront costs remaining un-recovered for having taken the risk and tried best possible endeavor to make it a success.

Decision making and implementation has to be quick even though the planning is for the long term. It is somewhat like running a marathon, but at the speed of multiple sprints so as not to lose focus on the long term goals as well as celebrating tangible short term success along the way, thereby retaining continued sponsorship for the overall program.

The other not so related thought that comes to mind is why cloud is not being spoken about extensively in the Finance and Accounting (F&A) BPO space. After all, the so called key F&A processes such as Accounts payable (AP), Accounts receivable (AR), General Ledger (GL) and Fixed Assets (FA) are so noncore to the finance function of the customers in the first place, which is why they go the BPO way towards the goal of reducing the cost of running the finance function as a % of revenue. These are clear candidates for being moved onto cloud based computing environment, typically a public cloud. Similarly processes around procurement and other horizontal offerings can certainly be looked at being moved the cloud way. Some extra ordinary mix and match of technologies, tools and providers are available in the Cloud space, which should be evaluated, selected and implemented along with the now over mature cost arbitrage based process and workflow automation tools, to get miles of first mover advantage for new customers or take existing customers to the next level of transformation.

Data privacy and security are key in cloud no doubt, but there are global best practices and standards around this which service provider are more than eager to implement.

Outcome based pricing is another area which is dreaded by most except commodity services as in the infrastructure maintenance space or low end BPO space where outcomes can be defined with ease and measured without ambiguity. Taking a true partnership approach, all the pitfalls of outcome based pricing needs to be overcome and progress needs to be made vigorously by service providers in this direction far beyond these two areas, with customers ready to share the benefits when outcomes are realized and the times are good without taking it away from the service provider. Continuity of account management & governance on both sides over a long period of time is very crucial here.

Fear of failure must be overcome, in order to succeed. And innovation, with relentless pursuit to implement it and showcase commercial success is a must.

Another aspect that comes to mind is how to deal with service. Today everyone wants to sell something to you and run away. When it comes to service, it is either expensive in the form of Annual maintenance contract (AMC) or spares, or the product goes obsolete much earlier than not so long ago, requiring a mandatory replacement. While in the IT world, this is natural, as technologies evolve, in the non IT space, it is important that products are made like the good old days where the product would function its stated purpose for many years or decades to come and there is reliable service around it. In general, today’s products are not built to that last very long as they used to be decades ago. Most of the spares within it require to be replaced at certain prescribed intervals or risk the warranty lapsing and the value of the product, such as a car, keeps going down very rapidly. While this means big business for the car manufacturers in the form of revenues from after sales spares and dealers on account of servicing and selling these spares, the end customer actually ends up buying a consumable in the form of a car, rather than an asset, as in the past. Similarly in IT, there is a need to build robust technology which will last a very long duration of time. IT when taken in its total cost of ownership is actually very expensive and hence this theme holds lot of importance.

IT should be used to solve world’s major problems such as food security, healthcare and natural disasters in a much more intensive, long term oriented and cost effective way than it is today and there should be lots of opportunities if this happens.

IT spend within emerging economies has to go up manifold and yet be affordable in such highly price sensitive markets and thereby enhance quality of living where most of the world’s population resides.

The last 2 themes will further help in reducing global economic uncertainty which is what this article started off with.

About the author: Rajesh R N

Result oriented and with rounded experience, Core strength is in creative, analytical and advisory roles spanning delivery, consulting and finance to help build high performing teams and also enjoy individual contributor roles.

After graduating from the St. Joseph’s College of Commerce, Bangalore University, Rajesh became a Chartered Accountant from the Institute of Chartered Accountants of India. Thereafter Rajesh went to U.K and underwent his Masters in Business Administration (M.B.A) from the Aberdeen Business School at The Robert Gordon University through a full time program.

Rajesh has close to 24 years experience since graduation, of which the recent 15 years were in the IT and ITeS industry involving roles in Program Management of large global complex transformation programs, Commercials and Contracts Transitions management, Solution design, Management Consulting. The remaining years are in Business Advisory services, Corporate Financial Management, Accounting, Auditing and Taxation in diverse industries such as oil and gas, property development, consulting firms, floriculture and bio tech. View Rajesh’s short bio