Unfortunately, not everyone in your organization has the same understanding or feels as strongly as you do that your project should be implemented – whether it is the entire change initiative, or an enabler such as training or software. While some projects might fly under the radar in the beginning, at some point someone with power has to say “Yes, let’s do this” for the project to continue.
The following tips are compiled from my many years as an industrial engineer, when one of my key responsibilities was to justify both capital and human capital projects to gain approval by the leadership team.
Know the decision makers. Within your organization, find out who makes decisions and how similar decisions are made. Who has the spending authority for a project your size? Who needs to say “yes”? What is the typical process for vetting and approval?
Speak the language. Find out what the decision makers believe is important, including both what they value and how they like to receive information. In my experience, for most projects I calculated payback (cost of the project divided by annual savings equals the number of years it takes to pay back cost). Other organizations might use net present value (NPV), return on investment (ROI), or other calculations. Also, find out if there is a threshold your project needs to hit to avoid automatic dismissal. At the same company few projects with more than two years payback would be approved.
Befriend someone from accounting. (Or engineering.) Enlist the help and support of someone in your organization whose blessing of your calculations and logic will give your credibility a boost. They will also be able to help you navigate the approval process.
Determine the competition for resources. Is this an either/or decision (they will choose either your project or another one)? Is it budget season? Would it be considered discretionary spending? Is it capital or expense?
Include the negative aspects. Although most likely you want the project to be approved, if you approach the process from the point of view of someone who just wants to know the truth, your justification will be more credible to decision makers. Don’t just load your analysis with the pros of the project. Include the cons as well to show that you’ve thought through all the implications – and how to overcome them or compensate for them.
Consider everything. Sometimes the small things add up. Occasionally when you reach beyond the obvious implications you’ll find something significant that can make or break the project. You may not want to nickel and dime the final presentation of your analysis, but you don’t want to leave out anything important that might otherwise be hiding. Consider the following (which could be benefits or costs depending on your project):
- Labor and material expenses
- Energy and other utilities or resources
- Environmental impact
- Safety and health effects
- Cycle time or other process improvements
- Inventory levels
- Maintenance, equipment and supplies
- Customer service impact
- Management capability and decision making ability
- Quality implications, error rates
- Employee impact, satisfaction, etc.
- Interest or cost of capital
- Installation and start-up efficiency, learning curves
- Training or hiring costs
- Regulatory compliance
Make the analysis dynamic. Since many calculations depend on assumptions of future events or forecasts, provide the ability to test scenarios for variable inputs, like labor or material prices (i.e. the price of gasoline) or volume changes (i.e. number of phone calls received). Also calculate the breakeven point for different variables – at what volume or price does the cost equal the savings? Showing what happens when assumptions change provide a feeling for the risk of the project. The ability to mitigate risk by demonstrating the robustness of the project will help leaders feel comfortable saying “yes.”
Conduct a trial. Especially for initiatives whose benefits are more intangible, conduct a trial to try to measure the improvements, which you can then quantify and forecast when the scope of the project expands. As an alternative, share the success stories of other companies or departments who have already implemented a similar project.
The first step toward implementation of your initiative is gaining the initial buy-in, approval and funding. Start with a sensible, well-informed analysis with the ability to demonstrate risk to help you get to “yes.”
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