Marketing Definition: Business Case

A solid business case makes any business decision transparent and reproducible

A solid business case makes any business decision transparent and reproducible. Develop and maintain a standard business case template as a reference and mutual decision foundation. Business decisions might be influenced in changing environments. The original assumptions must be recorded and worked against. Business cases align decision makers behind facts.

➔ Business Case B2B Marketing Practice Guide. Make it Work.

Stay at 30’000ft when discussing a complex business case

Managing complexity in business cases

Business cases come in all shapes and sizes. Mostly though they bear heavy time investments, become very complex quite easily. So, presenting or debating just the key facts can be a challenge.

Complexity blurs 

Important and/or expensive business decisions require sound preparation to describe a need, develop solutions to satisfy this need and offer a path forward. Information and data are gathered to support the decision as evidence.

Making the case for a desired decision to be taken can also be shared among several people. Hence everyone is more or less familiar with the entire case and all the elements that will support the decision maker.

In the real world it is not always clear who has a 30’000ft view of the problem at hand. Even when a standardized business case template is used there are not many involved people who could give an effective 60 seconds elevator speech about the case.

Why? 

Because people tend to concentrate on the details as they need to be well developed and waterproof when used in the decision making process. Stepping back for a broader view or taking the imaginary helicopter to fly to 30’000ft does not come naturally to most people.

 

Embarrassing encounters

Since many business cases deal with issues that are not simply prepared behind closed doors and exclusively handled there, there are countless encounters within the daily business life where people get to reflect on those issues or even debate them.

To be able to lead a structured discussion and focus on the crucial facts is a trait not many people possess. Instead we all know all too well about those unstructured, endless discussions that turn in circles.

Here are two example business cases that might be debated in larger groups throughout months:

Let’s say a current price erosion is being tackled with a business case to adjust the pricing strategy. Lots of data, anecdotal and factual evidence (from the market place) are being gathered. During internal sales or business development meetings the upcoming decision is being discussed as well as in the pub after the sales training.

Or a market intelligence software solution is chosen to structure vast amounts of market signals and alert the commercial colleagues to adjust their market approach. Here as well several managers offer their piece of facts to the business case and the topic explodes as an attractive hallway discussion.

But most of those discussions revolve around too many details and individual perspectives which makes it really hard to get to the core of the issue and understand the decision options clearly.

All this might paramount when executives ask for a quick run down of the business case or the classic 60 seconds elevator speech. Most colleagues are overwhelmed with the already gathered and discussed details. This can contribute to frustration and influence decisions.

In an individual worst case scenario, someone who is asked by the CEO in that mentioned elevator about that upcoming decision might come across as undeceive and off target if there is too much noise in the feedback. The CEO leaves that elevator with more question marks about the business case and maybe about that employee. 

The story in the business case

Translate structure into a story

What is needed is a simple structure as a sequence, kind of like a mini story with its own dynamic. A well structured business case however should already offer this structure!

It has always been there and can be used to familiarize anyone with the key facts and provide the script for that 60 seconds short movie in the elevator with the chairman or with any line manager who wants to learn about the business case really fast.

So, how is a business case structured?

The key elements of a business case, regardless of depth and complexity are:

  • Problem statement

  • Potential solutions

  • Offered approach

  • Risk assessment

  • Value analysis

Roughly in this form and sequence, with alternating terminology, any business case is developed with facts, data and assumptions along those lines and concludes with recommendations for action.

In other words decision makers will ask these questions that match the 5 bullet points above:

  • What is the need (resolving an issue or creating an opportunity)?

  • What is the solution (to eliminate the problem or to materialize the idea)?

  • How can this be done (process, resources, action)?

  • What are the risks today, the risks in the action and how to mitigate them?

  • What is the result and how does it impact our performance?

These questions will motivate to gather all sorts of evidence and arguments but they can also help to tell the detail from the essentials. In structuring the business case it is easy to fall back to these five questions consequently.

Imagine the 60 seconds elevator speech in which there is only room for one answer per question. Summarizing the key data and evidence into this one response helps to disengage from the many details that are in the way of a swift executive briefing.

5-step principle

Stay on track, keep it simple

Let’s take our example with the price erosion. The business case features several dozens of pages and spreadsheets with data, market intelligence and customer insights.

Taking an executive through the numbers or details is a no-go. Instead she wants to have a story. 

This is where the above structure comes in. Here are the answers to the five questions:

  • Our margins have decreased significantly. The evidence shows that capacity bubbles on the East coast are to blame.

  • Since our cost base has just been improved and the lemon seems to be squeezed a selective price increase could be a solution.

  • Most players have started to increase prices already. If we communicate carefully and offer additional contract extensions we can signal customer focus and long term commitment to the customers.

  • The risks to act have decreased by competition already moving into this direction. Doing nothing would further erode our bottom line and leave us with limited options like layoffs.

  • If we act swiftly and decisively, communicate carefully and complete the price increase without further delay we might not even get any negative press.

How is that for a 60 seconds elevator speech? 

Based on the above 5 questions that every business case needs to answer, those answers help to keep the top facts in order and tell a little story.

 

Make it count

Making a strong impression, supporting executives to feel comfortable with their decision has everything to do with facts.

Better even, if the facts are prepared with action in mind the whole executive summary would be more compelling. This format cannot only be used in an elevator speech but as a presentation opener orally or in short bullets.

Adding facts and action to our pricing example the five step elevator speech could look like this:

  • Our margins have decreased in a linear fashion by average 3% per quarter over the past four quarters. The evidence shows that capacity increases of 30% within the last 12 months on the East coast are to blame.

  • Since our cost base has just been significantly improved by 40% with the recent ‘FitOps’ program a selective price increase could be a solution.

  • 5 of the top ten competitors have started to increase prices already, on average by 10%. Our communication should be empathetic, personal and offer additional benefits like contract extensions with the new prices frozen for 12 months.

  • The risks to act have decreased by many top competitors already moving into this direction and it is well publicized in the 3 major industry magazines. Doing nothing will further erode our bottom line and leave us with limited options like layoffs.

  • If we act swiftly and decisively, communicate carefully and complete an 8% price increase without further noise within a week we might not even get any negative press and the investors gain additional confidence in our ability to take bold steps confidently to protect our business’ health.

Practicing this five step principle based on the general structure of a business case can become a very powerful habit and decision makers might show up more often to seek advice by anyone who can compute complex business cases and translate it into a compelling and convincing story.

Recap: A solid business case makes any business decision transparent and reproducible. Develop and maintain a standard business case template as a reference and mutual decision foundation.

Jens Thieme is a global B2B marketing professional, sharing his practical marketing experience, this marketing glossary and b2b marketing best practice examples.