The key to establishing executive approval for your project is to develop a solid business case. The definition of a business case includes a description of the problem or opportunity that exists, a plan and schedule, and a cost-benefit analysis. The key to a successful business case is to give definition to your gut feeling and to put the pieces of the business case into the perspective of your executives. In other words, how does what you propose fit into the vision and goals of the organization, what is the investment required, what are the benefits to be derived, where do the benefits come from and when will they occur, how quickly can the project be done, what are the risks associated with the proposed project and how will these risks be mitigated, and what are the annual cash flow requirements by quarter? For utility companies it is also important to categorize the investment in terms of capital and O&M to determine the impact on line-item budgets and potential utility rate impacts. Having a bulletproof business case that is communicated in crisp executive terms will increase your chances of winning executive approval and support.
A successful project starts with identifying a problem or opportunity within the organization.
Opportunity + research = Solution
Solution + executive support = Project approval
OPPORTUNITY: The need for change or improvement within an organization. Opportunities occur continuously within all organizations, and should be approached rationally, from the perspective of the organization’s best interest. By carefully choosing which opportunities to approach and resolve, you can create a pattern of success within an organization.
RESEARCH: Investigation of internal problem or opportunity, either by staff or outside consultant. Research brings the problem or opportunity into focus for the company and garners executive support for a solution. Carefully choose the researcher. Assigning company staff to investigate a problem or opportunity can skew the findings since the individual is not working from a neutral perspective. An outside consultant provides an objective approach to defining a situation, but may miss some of the finer details of a situation that a company employee would intuit. The best solution is an internal project team combined with a consultant who facilitates the research phase.
SOLUTION: An explanation of the opportunity, with a plan and schedule for implementing change, and the cost-benefit analysis that makes it feasible. To engender executive support, the solution must be packaged with a persuasive sales pitch and tangible benefits to the company.
EXECUTIVE SUPPORT: A champion of the proposed change, with the same level of decisionmaking influence as the individuals controlling the budget. For the project to be successful, the executive sponsor must be identified with the project from the onset. The project should be linked to the executive sponsor’s area of business expertise. This individual should have a dynamic professional relationship with the other executives, and be perceived by peers as a decisionmaker. Do not underestimate the power of a weak or indecisive executive to undermine the project. Careful selection of a competent, energetic executive sponsor will do more to further the viability of the project than any business case, cost-benefit analysis, or sales pitch will ever do. A successful project demands the involvement of a well-respected, knowledgeable executive sponsor.
There are certain critical factors to control to make a successful pitch in the executive suite. As the project sponsor, you need to know the exact definition of your project’s opportunity, be it a problem or a possibility; you need to identify an executive sponsor early in the project lifecycle; choose the research team; understand the research findings; and build the solution, from the work plan details, through the schedule for implementing change and the financial justification for proceeding with the work. After defining your project’s business case, you need to work with the executive sponsor to promote the project with the executive management team.
This paper assumes the organization has already identified the opportunity. What remains is how to create the fundamental argument for a proposed change within the company, and sell it to the decisionmakers with clarity and impact. The initial phase, prior to selling the project to the executive team, consists of three categories:
Research
Solution
Executive support
The first challenge in creating a compelling business case is to determine who should perform the research. Whether to select a team of internal staff members or an outside consulting firm that specializes in your particular challenge or opportunity is the first important hurdle to overcome. Internal staff may have an intimate understanding of the problem, yet may lack the expertise required to prepare the executive-level business case analysis. In addition, internal staff is frequently overloaded with a host of responsibilities and lacks adequate time to craft a convincing solution to the pressing problem or opportunity. This leads to the alternative option, hiring someone from outside the organization to prepare the research.
An outside consultant brings an objective point of view to any given situation. The consultant also increases the overall project expenditure, which can be a serious obstacle for many utilities. However, hiring a consultant may prove cost-effective in the long run, due to the wealth of experience a consultant brings to the situation from resolving similar situations throughout your industry. This experience is culled from companies with different corporate visions, budgets and priorities, giving the consultant experience in an array of corporate structures. This broad knowledge and experience will be valuable to the project’s success, when you are peppered with questions by a demanding executive team who wants to know exactly how and why your solution has worked in the past for other companies, and how it will work at your company. An outside consultant should work with you and the internal team, to prepare you for the line of questioning you will encounter in selling your project in the executive suite.
Once the individual or team of individuals responsible for defining the problem or opportunity and conducting the research has been established, the team needs clear goal definition. Clarity of purpose from the project onset will significantly increase your success in acquiring the necessary funding for your project. Weekly status checks, to ascertain that the team remains focused on the objectives defined at the project’s commencement, are critical. Proper project management of research, whether by internal staff or an outside consultant, keeps the project on schedule, and within budget. By keeping the research phase together and tight, you develop the skills necessary for the project you are defining, which you hope to fund. Every project phase is important, from information gathering to crafting a solution, to obtaining executive approval on funding, to actually performing the improvements defined in the solution phase. Attention to details throughout the entire project lifecycle lays the groundwork for successful work.
The solution needs a solid business case. It requires a well-defined purpose to attract executive support. This must be in line with the company’s established business objectives or vision. Attempting to gain budgetary approval for a solution outside of the company’s current business objectives is a fruitless task and should be avoided. Frequently, solutions for the utility industry will include the following objectives. Note that the examples are specific, quantifiable and easily described from a sales perspective. They are not ambiguous. They stem from existing problems familiar to the executive management team. They have practical, successful solutions that utilize technology.
Improve Customer Satisfaction
Improve customer service by having the capability to schedule many customer appointments on the initial call
Improve resource utilization
Provide accurate job status and cost information
Establish and meet scheduled commitments
Meet or exceed Utility Commission standards
Maintain or Improve Service Reliability
Provide customers with accurate outage information
Use outage information in system planning
Reduce the overall outage response time
Improve the accuracy of reliability statistics (performance-based rates)
Reduce Capital Costs Associated With New and Existing Customers and Maintain Delivery Time To Provide Service
Make and keep customer hook-up commitments
Reduce capital cost to connect new customers
Reduce handoffs and wait time in work processes
Eliminate duplicate work
Reduce Operations and Maintenance Cost For Existing Customers
Perform operating and maintenance work more efficiently
Better quality and more accessible information
Better use of resources
Support performance-based rates
Executives reading your business case and solution should receive several immediate impressions. There should be a distinct lack of technical jargon and acronyms on Geographic Information Systems (GIS), Work Management Systems (WMS), Outage Management System (OMS), etc. It should be easy to skim and absorb. The company’s Return On Investment (ROI) or projected savings and efficiencies of staff should be obvious at once. Remember to make conservative estimates, backed by your research, with regard to ROI or savings. Executives will hold you to your numbers, so be certain the numbers are realistic and attainable.
An effective way to approach selling improvements in the executive suite is to define several scenarios, which you present in compelling, clear terms. Each scenario should accomplish the proposed solution. Each must cover the following components, preferably in a chart or matrix that you present to the executive team:
Pros
Cons
Risks
Impacts on business processes
The research and solution should be published in a report of your findings. The most important component of this document is a high-level look at the project called an Executive Summary. The best writer in your organization should prepare this document. It should be the first section of your report because it is what the executives will skim before your sales presentation. It will give the executive team a first and lasting impression of your project.
The body of the final report is a baseline or present-day assessment of the business practices that you propose to reform or improve. This baseline consists of current labor processes and Information Technology (IT) costs. The baseline is the cost of doing business with today’s people, processes and technology. The business case scenario for the solution should demonstrate:
These are encountered in the aggregate of the following:
Hardware/software integration
Data conversion
Training
External support
Quantified in the following areas:
Increased labor productivity
Cost avoidance
Asset utilization
Strategic benefits
Potential benefit areas to be emphasized in your final report and presentation are:
Base labor loading and outside costs
(Staff levels can be maintained or reduced while service is maintained or improved)
Internal IT labor (COTS versus custom and use of contractors)
Maintenance of legacy systems (migrate to new platform)
Rewriting of existing technologies (use Web interface or middleware)
The baseline financial numbers should be presented in your final report as:
Annual baseline labor cost: $X million
Annual baseline IT cost: $Y million
Annual cost per customer: $Z
Project the potential savings using the same basic outline, based on the estimates derived from your research.
As the project manager, it is your responsibility to maintain a candid relationship with the executive sponsor throughout the research, solution and presentation phases of the project. This individual is very important to the project’s vitality. Energetic executive support dramatically increases the project’s chances of being fully funded, then supported throughout the project lifecycle by the executive management team. Three tips to remember when working with an executive sponsor:
Identify
Educate
Cooperate
The project manager needs to identify an individual who will be an asset to the project, educate this executive sponsor through all stages of project development and cooperate with this individual to create an appealing presentation.
Your presentation should demonstrate the improvements that your research has identified and how they complement current company objectives. The presentation should include a high-level schedule, so the executives see a clear-cut start and stop to the project. A primary component of the presentation should be before and after slides, under a specific heading, that give the executive management team a precise indication of specific improvements. The following are examples of persuasive before and after slides:
Before
Fragmented mapping and planning
Information about pipes and wires not easily accessible
After
Single, continuous, up-to-date GIS mapping model that shows installed and proposed equipment
Better technology for planning utility capacity additions and upgrading reliability
Visual asset analyses by age, type, and cost
Before
Difficulty in gathering complete information
No companywide design standards
After
Design and build process uses consistent standards and estimates
Design and close process updates system records immediately
Before
Multiple trips to the customer site
Current job status information not widely available
Uncertain/inefficient scheduling of appointments
After
Reduce overall time to connect new customers
Current job status available to all who need it
Appointments scheduled during initial call
Before
Limited outage information available during storms
Manual crew management system for scheduling
After
Current and accurate outage information available
Better coordinated response to electric outages
Facilitate Reliability-Centered Maintenance (RCM)
Ability to view, automatically assign, and dispatch resources on a system basis for trouble response and other work
Use a minimal number of technical terms.
Avoid acronyms. Many individuals are annoyed by the use of IT-specific acronyms. Avoid alienating your executive management team by choosing words that exclude, rather than include.
Be conservative in costs and benefits.
Think in sound bites. It is critical to hone your presentation into ideas that the executives can quickly comprehend. The executives may also need to justify their support of your project at some point in the future. By providing them with concise, well-researched ideas in your presentation, you enable their ability to broadcast the project’s benefits.
Practice your pitch with the executive sponsor before tackling the executive team.
Assumptions to make before you begin your presentation.
Assume 15 – 30 minutes of concentrated executive attention on a crowded agenda.
Assume you will lead the presentation and the executive sponsor will champion the project when they vote.
Assume executives are looking for winning projects, with tangible benefits to the company that they can explain in a 30-second sound bite to shareholders, constituents and other utility executives.
Assume strong competition from other projects competing for the same limited amount of money. Competition can be controlled with a persuasive sales pitch backed by well-researched documentation.
One of the most difficult parts of the actual presentation is turning the idea, the research and your solution into a coherent picture that promotes the company’s objectives in a limited amount of time. A tip for relaying complex ideas with lasting impact is to utilize visual images as much as possible during the presentation. Images are absorbed faster than reading text during a presentation. Most executives are inundated with printed material, from email to industry-specific papers and magazine articles, and tend to skim vast amounts of print each day. By using images instead of text, your project gets mentally imprinted as pictures, and thus separated from the nonstop flow of print going before most contemporary executives’ eyes.
Work on keeping your slides or overhead projections visually spare, legible and focused on the topic at hand. Clear messages imprint a positive impression of your project on the executive management team.
The most critical aspect of ensuring executive approval and support of your utility project is to have a champion on the executive management team. This individual should possess the same level of decisionmaking influence as the individuals controlling the budget. Your executive sponsor should be identified with the project’s progress from the project onset. A successful project demands the involvement of a well-respected, knowledgeable executive sponsor.
When your sponsor is in place, you should proceed with the well-organized research and solution design phase of the project that culminates in a compelling executive-level presentation, backed by a strong business case analysis. By having your financial information in a cost-benefit analysis, defining the impacts on existing business processes, showing savings in terms of cost avoidance, better management of assets, and greater labor productivity, you will have a dynamic presentation, coupled with an executive presence, to sell your project in the executive suite.
Dean Zastava, Associate Principal, SchlumbergerSema, for electric utility project management expertise.
Heather
M. Jernberg
Consultant
SchlumbergerSema
6399 South Fiddler’s Green Circle, Suite 600
Greenwood Village, CO 80111
(303) 566-6957 telephone
(303) 741-8401 fax
heather.jernberg@convergentgroup.com