The words ‘change initiative’ can cause concern for many organisations. Change is expensive and, all too often, change initiatives fall by the wayside due to problems with funding or execution. In the business planning process, once strategic objectives have been crystallised into key change initiatives, there remain two all-important questions: how will we fund the change initiative(s); and how will we ensure success? In this post we go over the steps that organisations must take to guarantee that there is a strong business case for change; that change makes financial sense; and that there are clear expectations as well as a rigorous risk management process.
In our previous post in the business planning series, we examine how an articulation of intended impact leads to a key change initiative that addresses a business or operational challenge. Key to the implementation of
initiative(s) is the development of an effective business case. When putting together a business case you should look at three main areas:
Financials are the backbone of any business case. A number of financial analyses can be performed to arrive at an accurate estimate of the cost of change:
In the same way that a robust framework is used for calculating the financials, expectations should be articulated and documented. These should be divided between financial expectations and non-financial expectations. Some of the non-financial expectations will be covered in the final phase (performance management and change governance). Example considerations include:
- How long will it take before the change initiative(s) deliver a return on the investment?
- What are the total expected costs?
- What are the total expected returns?
- When do we expect the benefits of the change?
- How are we measuring returns? What are our targets?
- What does success look like?
3. Risk management
Essential to the smooth running of the initiative(s) is a rigorous risk management process. All stakeholders should attend a preliminary meeting to discuss potential risks and mitigating controls. Subsequently, the project/change management team should meet regularly to monitor the identified risks to ensure that:
- Mitigating actions/controls are in place
- For each control, there is a back-up/additional control
- Timescales and deadlines are met
- The risk owner is held accountable for managing/resolving the risk
- Impact, likelihood and gross risk are constantly monitored so that the risk register is dynamic
- The status of the risk is effectively managed so that actions can be proactive rather than reactive
- An action list is tied to the risk register
These steps will all contribute to a comprehensive business case which will then need to be signed off by the relevant boards/staff. All that is left to do is gain support from management and make change happen! In the next post, we will look at how to manage performance and ensure that change is effectively managed throughout implementation.
As part of our series on business planning, we have developed a simple template to facilitate the process. Our template is a practical and concise resource that highlights the key areas that should be considered and suggests ways to structure the outputs of the planning process.
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[groups_member group=”Registered”]Business Planning Template[/groups_member]