The Guggenheim museum in Bilbao is a stunning piece of architecture that plays host to an impressive art collection. It’s a shining jewel in the local economy and identity and even starred in a Bond movie opening sequence. And it very nearly didn’t get built at all because the business case was initially misunderstood.
The original business case was based on accurate assumptions of the likely footfall associated with the proposed collection of artwork to be housed in the museum. But people don’t just go the Guggenheim to see the artwork. They visit to see the building itself. The seemingly impossible shapes of the exterior (achieved by repurposing software normally used to design aircraft fuselages) inevitably generate curiosity to see the interior. The result? Significantly greater numbers of visitors: Great for the venue, and great for the local economy.
But is the Guggenheim a one-off, or do business cases often misidentify the nature (as opposed to the quantum) of the business benefits? In field work, we see it happen a lot.
As an example, we had a client implementing a new finance system. The business case was based on modest savings achieved through reduction of headcount in the corporate HQ. Frankly, it wasn’t a compelling business case to begin with, but nobody in the c-suite seemed to honestly believe that a headcount reduction would happen anyway.
Everything changed when the CEO visited a branch, and happened to be speaking to the newly appointed branch manager. She was highly competent and enthusiastic, but when asked what aspect of her role she found most challenging she singled out financial reporting. Why? Because it was taking her two days per months of manual manipulation of data in Excel, and she was never quite sure whether the calculations she’d arrived at were correct and consistent, month on month. Then the second question: How did it work in her previous role? Answer: She simply pressed a button.
The big unlock of the business case came with the third question: If she didn’t have to spend time in Excel, and could just press a button, what would she do with her two days instead? Answer: She’d be out in the front of house, maximising revenue. That was a completely different form of benefit, and given the business had over 500 locations, the EBITDA impact could be enormous: It would certainly dwarf any cost savings from modest headcount reductions at Head Office.
What the client did next (at our suggestion) really brought the business case to life. The branch manager was assigned resources to do the number-crunching for her (as the finance system was still months away from launch) so that she could get out there in the front of house and start proving the business case straight away. It transformed the business case from a theoretical extrapolation to a demonstrable reality, and it also allowed her to advance up the learning curve so that she could then start to educate her 500+ peers on how to do it.
So, the morals of the tale:
1.
Sometimes, it’s the nature, rather than just the extent of the business benefit that can be misunderstood.
2.
There are often ways to prove rather just project it, and you don’t have to wait for the live system.
3.
Moving up the learning curve early builds vital social proof and accelerates the ROI.