Why is it important for you to learn how to craft a powerful business case for your HR initiatives? Well, like any other major business undertaking, HR initiatives require time and resources in order to be effective and result in real change. Unfortunately, the people who hold the company purse-strings, namely the CEO, CFO, and other senior leadership, tend to undervalue HR transformation. They frequently think that HR is around to make sure nothing goes too wrong, but that it cannot deliver real business results.
As an HR professional, you know this mindset isn’t correct. People are what drive a business’ success, and you make sure that the company’s people power is being cultivated and leveraged as effectively as possible. If HR isn’t doing an effective job, then none of the company’s goals will be achievable.
The challenge, then, is making senior leadership understand what you already know. If you are planning and pitching an HR initiative, then you have a good reason to believe that it will transform how the company operates and performs. Articulating that potential in a powerful business case allows you to speak the leadership’s language and get the resources you need to implement your initiatives.
So, how do you go about putting together a business case that will win over senior leadership? Let’s examine the key components of an effective HR business case, using an employee engagement campaign as an example:
- Craft your messaging to leadership pain points and priorities
- Diagnose business challenges and opportunities
- Develop your solution
- Outline desired results for both HR and the company as a whole
General Approach
Before we get into the specific steps for crafting your business case, let’s consider how you should frame your messaging throughout each step. While following the advice laid out in this article, always keep your audience in mind.
You know why you want to implement this initiative from an HR perspective, but leadership will not come at the issue from that same perspective. For instance, you may see more efficient processes or happier employees as an end to themselves, but your leadership team might not – at least not enough to justify a significant investment. That is why it’s a good idea to try whenever possible to break out of an HR mindset, or at least link the issues you identify as an HR expert to issues and perspectives that senior leadership will prioritize.
One great way to appeal to a broader audience and make a compelling business case is to be as objective as possible, and to quantify whenever possible. Complex human issues cannot just be broken down into numbers and dollar signs, and it can be frustrating when the CFO or CEO wants you to do just that. At the same time, though, linking your initiative and the issues it is meant to solve to concrete business results can make or break your bid to get the resources you need.
Speaking of business results, another great approach is to frame the initiative within the context of the company’s bigger picture. That means that you should try to link the issues, solutions, and results that you outline in the business case to the company’s business strategies, goals, and bottom-line whenever possible. This will help you show key stakeholders how your initiative will make their jobs easier and help them to accomplish their goals.
Finally, don’t be afraid to enlist outside help when crafting your business case. Think of your counterparts in other departments as your allies in building the case, even and especially if they are also part of the case’s audience. Seeking outside input will help you identify stakeholder pain points and get a better sense of the initiative’s effects throughout the company. Similarly, reaching out can give you access to vital data that will help you prove your case and track your success. For instance, the CFO could provide you with financial information that helps you connect the dots and show the true cost of low employee engagement. As a bonus, getting leadership input while creating the business case will also increase your odds of success. They will feel as though they had a hand in crafting the business case and so will be invested in the project, giving you a leg up in getting the resources you need.
Now that we’ve covered the general best-practices for approaching an HR business case, let’s take a look at each major step in building the case.
Step One: Diagnosis
In order to make the case for why leadership should invest in your initiative, you first have to establish the need for the initiative. This involves identifying business challenges, processes that could be optimized, and opportunities for change. This step will help build the value proposition for the initiative and provide valuable context to help your audience understand the reasons behind the initiative.
First, identify the business challenges that you are trying to address. In our case, this would be low employee engagement. This might be signaled by low productivity, high absenteeism, and high turnover. Next, link this challenge to the company’s performance and financial health. Continuing with our example, it might be a good idea to calculate the cost of replacing employees, among other things.
Once you have established the problem, it’s time to look for causes. Try to find the gaps in how things work now that are contributing to the business challenges. These could be ineffective processes or missing processes. In our case, some issues you might discover are poor communication of company direction and employee contribution to it, inaccessible leadership, too few or too many meetings, and unclear advancement procedures. As always, try to pin down as many details and data as possible when identifying the causes. For instance, quantify the extent to which each issue contributes to the lack of engagement. You can use that data later to justify the expense for each part of the solution.
After you have identified the challenges and causes, look for opportunities for solutions. You will create the detailed solution in the next step, so for now keep it general. What broad-strokes plan or plans could solve the causes and address the challenges?
Now the good news is that you have probably given the challenges, causes, and opportunities a significant amount of thought while you developed the initiative. That means that you will have a good idea of where to start and what to look for in this step. Much of the work will have to do with framing what you have already considered in terms that will resonate with senior leadership.
Step Two: Solution
Now that you have communicated the need for your initiative, it is time to explain the initiative and why what you are suggesting is the right solution for the problems that you identified.
Be as specific and concrete as possible about what new policies and procedures you want to establish. Outline what will be changed, added, and removed and how that will be accomplished. For each step, describe what resources you will need and how they will be allocated, along with how the step will contribute to the solution. This will help you present a clear cost/benefit analysis and justify each expense.
It is also a good idea to provide a timeline for project execution and completion. Describe when you will implement each component of the initiative and when the complete solution will be in place. Then establish follow-up procedures and key metrics to measure project success. Leadership will feel more at ease investing in a project when you give them a way to tell whether or not the initiative worked and what return they got on that investment.
Let’s move on to the last step, in which you will show what the initiative will achieve for the company.
Step Three: Desired Results
In step one you identified challenges that you wanted to address. In this step you outline what effect your initiatives will have on those challenges, and what that will do for the company’s performance and financial health. This section is divided into two sub-sections: internal effects and ultimate project impact.
The internal effects are the intermediate steps that drive the ROI. Fundamentally, they are improvements in the way that the company operates. Describe how your initiative will make the company more effective. In our example, you might outline the benefits to employee performance, individual and team productivity, collaboration, turnover, and reported sense of engagement.
The project impacts affect the company’s bottom-line. If you are unclear whether a result would fall under the first or second category, consider whether or not it has a dollar-value attached to it. If it does, it’s in this second category. Returning to the example of the employee engagement campaign, impacts might include the revenue generated by increased productivity or savings from decreased turnover.
Round this step off with clear takeaways that will resonate with senior leadership. These combine the effects and impacts that you identified above into bigger-picture ROI and cost/benefit analyses. Paint a picture of what the company will look like after the initiative. You gave your audience the stick in the first step by showing what challenges the company will continue to face without the initiative, now present them with the carrot of what they will gain by giving you the resources you need. If you’ve done a thorough job on the previous steps, you should leave your audience with a clear narrative for why your initiative is not only beneficial, but necessary.
Key Takeaways
It’s important to make sure that you build a compelling case. And in order to do that you should:
- Speak to leadership pain points and priorities
- Be as specific and quantitative as you can
- Identify key business challenges that your initiative will address
- Outline the initiative, complete with the cost and time required for each step
- Show why the proposed initiative is the most effective solution for the challenges
- Present the results you expect to see from the initiative, both in terms of internal processes and business success
