I was recalling a past conversation to one of my clients today; it was based on the idea that 'all decisions are financial'.
The conversation that I was recalling was between me and a talented Engineer who was frustrated by his boss' lack of enthusiasm to an improvement he had identified.
I asked him to explain the improvement to me. It sounded good, so I asked him a further question.
"Why doesn't your boss seem interested?"
"He doesn't understand this stuff" was the Engineer's reply.
As I probed a little further I asked the Engineer about how he had approached his boss with the improvement.
It turned out that he had posed the improvement purely on its technical merits (which, as an Engineer, looked good to me).
He had failed to speak to his boss in a common language - money.
I accept that there are many ways to justify an improvement, but putting things into financial terms (or even just putting a hard number against the benefits) can be all that separates the good ideas that don't get implemented and the ones that do.
The Engineer's improvement would have cost about £1500.00 to implement and would save the business downtime in the region of £8000.00 each month going forward. Getting the numbers wasn't difficult, but it did paint the improvement in a different light!
So, if you are struggling to get your bosses to sign off your improvement plans and you haven't put some numbers against the benefits (and costs where applicable) maybe it is time to rethink your strategy.
Have fun with the calculator!
Giles Johnston
Author of Business Process Re-Engineering
The conversation that I was recalling was between me and a talented Engineer who was frustrated by his boss' lack of enthusiasm to an improvement he had identified.
I asked him to explain the improvement to me. It sounded good, so I asked him a further question.
"Why doesn't your boss seem interested?"
"He doesn't understand this stuff" was the Engineer's reply.
As I probed a little further I asked the Engineer about how he had approached his boss with the improvement.
It turned out that he had posed the improvement purely on its technical merits (which, as an Engineer, looked good to me).
He had failed to speak to his boss in a common language - money.
I accept that there are many ways to justify an improvement, but putting things into financial terms (or even just putting a hard number against the benefits) can be all that separates the good ideas that don't get implemented and the ones that do.
The Engineer's improvement would have cost about £1500.00 to implement and would save the business downtime in the region of £8000.00 each month going forward. Getting the numbers wasn't difficult, but it did paint the improvement in a different light!
So, if you are struggling to get your bosses to sign off your improvement plans and you haven't put some numbers against the benefits (and costs where applicable) maybe it is time to rethink your strategy.
Have fun with the calculator!
Giles Johnston
Author of Business Process Re-Engineering