Alternative Development Best Practice 1 – Reality Questions

Many exciting ideas for new product and service offerings are generated every year; often appearing as the next great pursuit that will surely propel the organization ahead of its competitors. With this view in mind, those conceiving of these ideas create business cases for leadership. Too often, these eager employees unwittingly identify every fact and figure supporting their proposition and ignored those that would shed doubt. Subsequently, the business cases developed present only a partial picture of reality; potentially omitting true shortfalls that diminished value or place the organization itself at risk.[wcm_restrict plans=”40737, 25542, 25653″]

As with the development of every decision option assessment, it is important to create a complete picture by presenting all contributing and influencing factors. Reality must be acknowledged if the business case is to provide decision-makers with as accurate a picture as possible on which they will make the final approval decision.

Those developing business cases should challenge the completeness of their evaluations. This can be easily done by employing the following practices and questions:

Practices

• Ask other business planners to review and challenge the business case
• Use outside advisers/consultants to develop the business case (see StrategyDriven Strategic Analysis Best Practice – Independent Assessors)
• Use company adopted assumptions and variables when developing the business case
• Evaluate the business case against those of other successful past projects

Questions

• Does the business case yield a result that seems too good to be true?
• Are there bounding limits on the business case’s market/profit growth projections?
• Does the business case include an estimate for typically ‘unfunded’ costs? (see StrategyDriven Project Management Warning Flag – Unfunded Activities)
• Where the business case calculations converted to net present values?
• Does success rest on the discovery or application of new technologies? Has this risk been adequately factored in?
• Have cross organizational contributions, costs, and other required support been included in the business case? Has the ability and willingness of the other organization leaders to provide these resources been accounted for?
• Has the business case taken into account future market trends?
• Has the business case accounted for business cycles/product and service seasonality?

Final Thought…

Like all future predictions, no business case will be entirely accurate. In hindsight, some may be fully wrong. However, it remains critically important to provide decision-makers with as complete a set of information as possible in order to maximize the organization’s chances for success.[/wcm_restrict][wcm_nonmember plans=”40737, 25542, 25653″]

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