1. Building a Better Business Case December 20, 2011

2. 2 “Figuring out the right things to do isn’t nearly as difficult as continuing to do them over the long term.” Our webinar will begin in a few minutes.

3. December 20, 2011 Building a Better Business Case

4. 4 Our webinar will begin in a few minutes. “Remember: The problem for most of us isn’t knowing what to do… it’s doing it.”

5. December 20, 2011 Building a Better Business Case

6. 6 Our webinar will begin in a few minutes. “The greatest attribute for any business leader is perseverance.”

7. December 20, 2011 Building a Better Business Case

8. 8 Our webinar will begin in a few minutes. “All organizations are perfectly designed to get the results they are now getting. If we want different results, we must change the way we do things.” Tom Northup

9. December 20, 2011 Building a Better Business Case

10. 10 Our webinar will begin in a few minutes. “It’s useful to think of excellence in two broad categories: Customer excellence and business excellence.”

11. December 20, 2011 Building a Better Business Case

12. 12 Our webinar will begin in a few minutes. “Satisfied customers drive business success – and business success enables investment to satisfy customers.”

13. December 20, 2011 Building a Better Business Case

14. 14 Our webinar will begin in a few minutes. “ Excellence is not a destination; it is a continuous journey that never ends.” Brian Tracy

15. December 20, 2011 Building a Better Business Case

16. 16 Our webinar will begin in a few minutes. “ We are what we repeatedly do. Excellence, then, is not an act but a habit.” Aristotle

17. December 20, 2011 Building a Better Business Case

18. 18 Our webinar will begin in a few minutes. “People go in the direction leadership is walking, not pointing.”

19. December 20, 2011 Building a Better Business Case

20. 20 Our webinar will begin in a few minutes. “Every job is a self-portrait of the person who does it. Autograph your work with excellence. “ Unknown

21. December 20, 2011 Building a Better Business Case

22. 22 Our webinar will begin in a few minutes. “Excellence is doing ordinary things extraordinarily well." John W. Gardner

23. December 20, 2011 Building a Better Business Case

24. 24 Our webinar will begin in a few minutes. “Discipline is the bridge between goals and accomplishments.” Jim Rohn

25. December 20, 2011 Building a Better Business Case

26. 26 Our webinar will begin in a few minutes. "Measure is the ability to mesh strategy with reality, align people with goals, and achieve the promised results.“ Larry Bossidy

27. December 20, 2011 Building a Better Business Case

28. 28 Our webinar will begin in a few minutes. “The strategic agenda demands discipline and continuity; its enemies are distraction and compromise.” Michael E. Porter

29. December 20, 2011 Building a Better Business Case

30. 30 Our webinar will begin in a few minutes. “One of the major barriers to achieving lasting excellence is how little formal effort organizations put into learning how to execute strategy.”

31. December 20, 2011 Building a Better Business Case

32. 32 Your Presenter Matt Lauth Managing Partner Strategy Execution Advisors Certified Business Coach

33. Building a Business Case 33 In today's business world, making change requires having a well- thought-out and well-documented approach. The starting point is creating a compelling business case. During this webinar we'll show the 8-steps in creating a solid business case and provide an example of a business case you can use within your own organization. 1. What value does a business case provide? 2. What are the steps involved in creating a business case? 3. Creating a business case and supporting template. 4. Example of a completed business case. This is 1 hour of your time that will give you the information needed to create your own business cases to use within your organization.

34. 34 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Business Case for Change Implementing Change & Results

35. What is a Business Case? 35 A business case captures the reasoning for initiating a project or task. It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argument or presentation. The logic of the business case is that, whenever resources such as money or effort are consumed, they should be in support of a specific business need. An example could be that a software upgrade might improve system performance, but the "business case" is that better performance would improve customer satisfaction, require less task processing time, or reduce system maintenance costs. A compelling business case adequately captures both the quantifiable and unquantifiable characteristics of a proposed project.

36. What is a Business Case? 36 Business cases can range from comprehensive and highly structured, as required by formal project management methodologies, to informal and brief. Information included in a formal business case could be the background of the project, the expected business benefits, the options considered (with reasons for rejecting or carrying forward each option), the expected costs of the project, a gap analysis and the expected risks. Consideration should also be given to the option of doing nothing including the costs and risks of inactivity. From this information, the justification for the project is derived. Note that it is not the job of the project manager to build the business case, this task is usually the responsibility of stakeholders and sponsors.

37. 37 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Poll Questions

38. Value of a Business Case 38 Ensures the investment has value and importance Ensures the project will be properly managed Ensures the organization has the capability to deliver the benefits Ensures the organization’s dedicated resources are working on the highest value opportunities Ensures projects with inter-dependencies are undertaken in the optimum sequence.

39. What are the steps involved in creating a business case? 39 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Source: http://www.oracle.com/us/products/consulting/resource- library/building-business-case-for-change-069841.pdf

40. 40 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Creating a Business Case

41. 41 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 1. Define Scope & Stakeholders Clear on the scope of the proposed change. What business functions are impacted by the change. What business groups perform or rely upon these functions. Who owns these functions.

42. 42 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 2. Define Organization Goals, Strategies and KPIs What organizational goals and objectives will be achieved? What organization strategies will be enacted by this change? Which business processes will be improved by this change? What will be the key performance indicators (KPIs) used to measure the current situation and the future business results?

43. 43 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 3. Baseline Current State Performance What are the “pain” points for the organization this change will address? What performance data supports the “pain”? What have the trends been? What is the cost of doing nothing?

44. 44 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 4. Define Change Scope & Solution What needs to be improved? Who are the business stakeholders and sponsors who would be affected by the change? What are the solution elements to improve the problem? Are there alternative solutions?

45. 45 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 5. Estimate Potential Business Benefits What are the potential business performance improvements? Use the same KPIs used in step 2. Focus on quantifiable benefits. Support the quantified benefits with qualified benefits. If multiple solution options are under consideration, analyze all of them.

46. 46 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 6. Estimate Cost & Risks Define the costs of the proposed change. Assess the risks associated with making the change. Include how the costs and risks will be accounted for. Assess the maturity of the organization around the area of change being proposed. – Use a simple 0 to 5 scale; 0 not doing, 5 highly proficient – Assess how far this change will move the organization on the continuum to assess overall risk.

47. 47 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 7. Create Timeline Define timeline for change initiative. How long will planning take? How long will implementation take? How long will it be until results are seen? How long will it be until the expected change is realized on a consistent operational basis? Will benefits be incremental or all at once? Will benefits be one-time or ongoing?

48. 48 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 7. Model ROI Document your assumptions. Document the return on investment (ROI) expected. Provide a time-sequenced cost and benefits view.

49. 49 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Example Business Case

50. 50 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Increasing Shareholder Value by Implementing a Strategy Execution Program

51. 51 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 1. Define Scope & Stakeholders Current Situation: 1.Research shows, and our experience supports, our ability to plan and implement our plans is not very good. 2.We have not invested in our strategic and operational planning systems at the same rate we have in other functional areas. 3.We do not have a holistic way of connecting and engaging employees on their contributions to our overall plans. 4.We have the potential to grow faster than our industry and at a profit level higher than our peers. Organize for Success: 1.Executive Sponsor: Brian Jenkins 2.Steering Committee: n/a 3.Project Team: Senior Leadership 4.Advisor: Strategy Execution Advisors

52. 52 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 2. Define Organization Goals, Strategies & KPIs 1.Be #1 or #2 in our market. 2.Have high customer satisfaction and loyalty. 3.Create a realistic plan to grow the organization over next 5 years to roughly double it’s current size. 4.Complete 1 major acquisition in next 36 months. 5.Transition ownership and control of the business. 6.Provide an environment that leverages the talents of our team members. 7.Become more active in the local community.

53. 53 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 3. Baseline Current State Performance 1.We do not consistently or effectively include the voice of our customers and employees in our planning. 2.We have no defined, repeatable approach to how we conduct our annual planning. 3.We do not communication our plans to the whole organization to get buy-in, engagement and ultimately ownership and accountability. 4.Our growth performance is at or below the industry growth rate. 5.Our profits have been inconsistent; SG&A costs increasing as % of sales. 6.Our employee turn-over has increased over the past 3 years.

54. 54 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 4. Define Change Scope & Solution 1.Educate Senior Leadership on the costs, value and return of automating and having a systematic approach to how the organization plans and implements change initiatives and performance measures. 2.Adopt business coaching and facilitation on the Six Disciplines Strategy Execution Program: 1.Facilitate Annual Planning Activities and Planning Retreat 2.Provide weekly, monthly and quarterly coaching and performance reviews 3.Implement the Six Disciplines Software tool (add-in to Microsoft Outlook) to connect knowledge workers of the organization with strategic and operational plans.

55. 55 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 5. Estimate Potential Business Benefits 1.Alignment, communication and accountability of senior leadership and the whole organization around a common mission, core values, vision and strategic plan. 2.Increase our top-line growth through better planning and implementation of growth drivers to the organization. ($100k) 3.Increase gross margins through better implementation and management of strategic initiatives. ($50k) 4.Lower SG&A: increased productivity of knowledge workers. ($125k)

56. 56 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 6. Estimate Costs & Risks Initial Investment: $ 1.Strategic/Annual Planning: $5,000 2.Sr. Leadership Time: ~3 days 3.Duration: over span of 4-8 weeks 4.Monthly Coaching: $500 per month 5.Software Fees: $50 per user per month 6.Training: $0; online, included in program 7.Support: $0; included as part of coaching service Annual Ongoing Investment: 1.Annual Planning Retreat: $5,000 2.Monthly Coaching: $500 per month 3.Software Fees: $50 per user per month

57. 57 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 7. Create Timeline 10 Days 10 Days 20 Days 20 Days 90 Days 90 Days 80 Days 80 Days 70 Days 70 Days 60 Days 60 Days 50 Days 50 Days 40 Days 40 Days 30 Days 30 Days Rate and Close Prior Quarter Individual Plans Update Measures Publish Grade Cards Conduct Annual Planning Session Engage the Team Meeting Administer Alignment Survey Initiative Workshop(s) Individual Plan Workshops Finalize Initiatives Finalize Individual Plans Complete Approvals Administer Stakeholder Surveys Request Expert Reviews Conduct Competitive Analysis Distribute Plan Notebook Measure/Grade Card Workshop Analyze Alignment Survey Results Finalize Goals Statement

58. 58 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 8. Model ROI Current Sales$10,000,000Impact Increased growth potential1% $ 100,000 Gross margins50% $ 50,000 Personnel related costs50% $ 2,500,000 Reduced wasted time (1%=5 min)5% $ 125,000 Contribution $ 175,000 Program cost $ 25,000 Gain $ 150,000 ROI shows first-year and ongoing annual yearly gain of $150k; which would be a 6x return on investment.

59. 59 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Wrapping-up

60. 60 I. DECIDE WHAT’S IMPORTANT Strategy II. SET GOALS THAT LEAD Plan III. ALIGN SYSTEMS Organize IV. WORK THE PLAN Execute V. INNOVATE PURPOSEFULLY Innovate VI. STEP BACK Learn

61. Decide to Thrive 61 Improve Your Top Line – better plans lead to better results, our clients see topline improvement of 3- 10%, sometimes more. Improve your Bottom Line – better execution and focus on what “should” means to the business generates more profit, our client see profit that outpaces their peers on national benchmark reports. Recognize that Time is Money – the longer you wait the longer it will be before your organizations performance improves. Empower Your Employees – providing a system to connect actions to goals is empowering, it’s foundational to creating better leaders at all levels.

62. Upcoming Webinars 62 1.October 21 th : Excellence in Annual Planning 2.October 28 th : Discipline I – Decide What’s Important 3.November 3 rd : Discipline II – Set Goals That Lead 4.November 30 th : Discipline III – Innovate Purposefully 5.November 30 th : Discipline V – Innovate Purposefully 6.November 30 th : Discipline V – Innovate Purposefully 7.December 6 th : Discipline VI – Step Back 8.December 13 th : Six Disciplines Software Overview 9.December 20 th : Building a Business Case 10.January 10 th : Leading Change – Putting Plans Into Action For more information and to register, visit: www.StrategyExecutionAdvisors.com/webinars

63. Thank You ! Matt Lauth mlauth@sxadvisors.com (419) 348-8046