By Shardul Mehta
Note: This post was originally published on Shardul’s Blog, the Street Smart Product Manager. It is reprinted here with permission. Shardul also published a follow up post to this one on his blog. You can find that post here.
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I have a confession to share.
I don’t like business cases.
At least, I don’t like the traditional way I’ve been taught to prepare a business case. Why do we prepare business cases? Convention. The conventional approach to pursuing a new product idea in an organization is to first prepare a business case. This is what we’ve always been told. It’s what we’re taught in business school, and there are even competitions organized around it. And it’s been reinforced every time we need IT and implementation resources for a new idea: the only way I could get those resources was by having a business case. And this usually meant filling out a cumbersome form or writing a big document.
Now, I’ve written many business cases in my career. Some good, some excellent, many bad ones. Over the years, I’ve gotten pretty good at it. But every time I did it, I hated it.
There are many reasons, but since this is a blog post and not a book, I’ll share three:
1. I always felt it was a time consuming exercise in guesswork. For example, I’d be asked to estimate (guestimate?) market size and put multi-year financial projections. This, I felt, was an exercise in future prediction, and we humans aren’t always the best at predicting the future. I’m certainly not.
2. No one reads it. People are busy. They don’t have time. Most want the elevator pitch. I can’t count how many pitches I’ve been in where the execs flip to the end or simply ask you for the bottom line: what’s the opportunity, how much do you need, why do you need it, when do we see return. 60 seconds. Go.
This means a business case is nothing more than a 20, 50, or 100-page paperweight. Steven Blank famously called a business plan “a document investors make you write that they don’t read.” The same could be said for the traditional business case:
“A business case is a document executives make you write that they don’t read.”
3. Selling the business case is hard. This is especially true in larger organizations. Lots of opinions. Lots of approvals. Competing agendas. And back to #1, what you’re doing is trying to sell a non-validated promise. This means you’re asking the executives – the ones entrusted with the financial well-being of the company – to shift resources currently assigned, or approve a lot of money, or both, for something that has a high degree of uncertainty.
A related challenge is ensuring internal stakeholder alignment and support. It’s important to capture and address stakeholder concerns to ensure continued buy-in, and that everyone is on the same page. This is time consuming. Part of that has to do with the realities of coordinating schedules. But also I’ve found this experience to be very ad hoc and messy. There must be a better way.
Is there a better way?
Now, maybe the way I’ve gone about creating and selling my business cases has been wrong. Maybe my situation is unique. Maybe others don’t find this process so wasteful. Maybe they’re more brilliant than I am in creating awesome business cases that always get approved. Maybe they work in organizations that have streamlined the process to pursue a new product idea.
Maybe I could test that hypothesis.
So I did. I set about to find out what other product management folks’ experiences have been with the traditional business case process.
I reached out to 40 product management professionals. Over a three week period, I spoke with 24 of them. All had experienced preparing and selling a business case for a new product idea. They had an average of 7 years PM experience, and had titles ranging from Product Manager to VP of Product Management.
They worked across the country, in companies across a range of industries, as big as tens of thousands of employees to smaller ones with 50-100.
My Findings
Getting buy-in was rated as the #1 problem by every person except one. And that person rated it as a very close #2.
75% of them validated that maintaining stakeholder support and alignment is important, but a challenge. Only 3 out of 8 pursed doing this in any kind of systematic manner. Most agreed it was pretty ad hoc.
So this clearly validated the third problem I listed above. What about the other two?
Now comes the interesting part. Though creating the business case was acknowledged as time consuming (validating that piece of my first problem), most did not feel it was a major pain point. Not entirely surprising, because like any self-respecting product manager, they all felt confident in their ability to put together a solid business case. Yet, when I probed deeper into their feelings about the actual act of preparing a business case, I uncovered an outpouring of vitriolic frustration. Here’s what some of them had to say:
- “It’s a necessary evil. But it’s a wasteful process.”
- “It’s a joke.”
- “It’s just a lifeless Powerpoint deck.”
- “It’s a manager fighting with an Excel spreadsheet for a month.”
- “I’m forced to project revenues out of thin air. Putting revenue projections is a nonsensical exercise.”
- “Financial analysis – it’s really just pretend.”
Note the words being used: “lifeless”, “nonsensical”, “pretend”, “joke”, “evil”.
And my favorite comment:
“You are describing my life!”
Yikes.
I feel safe to say this feedback clearly validated my entire hypothesis.
So what’s the solution? This is not so easy to answer. It seems to me we need a different way to pursue new product opportunities within our organizations. One that will allow us to create more validated business cases, and provide us with tools and resources needed to obtain that validation. One that will enable us to more systematically build and maintain critical internal support. And one that allows us to spend more time developing and testing product than writing paperweights, while also providing an economical and efficient means to communicate progress for continued engagement, feedback and buy-in.
What has your experience been with business cases? How have you pursued a new product idea in your organization? Please share your frustrations or joys in the comments below or let’s chat!
Shardul
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