The CEO conundrum: Saying Yes to the right project

How many times have you read an email from one of your senior management team and it’s a request for a big chunk of money to be spent on a project or bit of software you’ve never heard of?

How do you make that decision? Gut feel?

What if you had every single department asking for money? You know you can’t say yes to every request. So, how do you make this decision? Who shouted the loudest? Who was first? Who seems to need it most?

After all, these decisions are what will make your conversations with the board easy or difficult.

There’s a method you can use

Let’s take a look at two common request avenues: Marketing and IT.

Marketing have an idea that will allow them to create a massive return on investment and will only cost £100,000 to pull it off. They absolutely guarantee that it’s a winner.

IT want to spend £112,300 on new laptops for everyone. Their reasoning is that it’ll increase productivity, allowing people to work quicker than before as it won’t take as long to open files and programmes, as well as having more capability to run better programmes.

As you read these two requests, you’re acutely aware that you have £125,000 left in your budget this quarter. So, which do you choose?

The data

The first part of the method is to look at the facts, and get data that answers the following for the marketing team

1. What is marketing’s current ROI?
2. Have marketing done anything similar to this?
   1. If so, what was the result?
3. Will this project impact any other work?

And for IT:

1. How much time will it save?
2. What was the impact on the business during the previous mass hardware change?
3. How many support tickets are for issues they have identified in their request (programmes crashing, not having the right tools for the job, etc)?

The right reports will give you the data which shows you the answers to all of these questions.

But how would this help?

Because you can then use numbers alongside the data to help you get to your decision.

Let’s answer the questions for the marketing department with data, and then add some numbers in.

1. The report shows that marketing are currently showing a healthy return on investment
2. The report shows that they undertake 3 big projects like this a year
3. Of those previous projects, we haven’t seen a dip in performance overall

With numbers, that now looks like this:

1. The data shows that marketing are currently performing at a 134% ROI, with £1.45m in sales being attributed to them, which is up 21% when compared to last year
2. The large projects last year brought in £2.64m in sales
3. During the projects, income from other marketing avenues remained stable at £154k per month, and we saw an increase in the effectiveness of other marketing avenues directly after the projects, with monthly sales increasing to £214k

All of a sudden, the £100k investment seems like a no brainer doesn’t it?

Let’s apply the same to the IT request.

1. It will save 1 hour, per person every week
2. There was a downturn in response time to customers and orders being fulfilled
3. There has been an increase in tickets over the past month

And now with numbers:

1. It will save 1 hour per person, per week, which will see an increase in productivity of 43%
2. Response time to clients increased by 17% as people had teething issues with the new hardware that hadn’t been set-up correctly and 17 orders were fulfilled a day late
3. Tickets have increased to 193 per month across the group from 36

Now, this may not be as clear cut as the marketing one, but point 1 and 3 are compelling…

Ok, I have numbers and data, now what?

It’s time to put a business case together. And the solution may seem obvious…

The marketing request, whilst not guaranteed to produce similar results, is a good decision.

But, whilst the IT change may be painful short-term, it needs addressing for long term success.

The solution?

Approve the marketing request and ask for data and figures to roll out the hardware change on a department-by-department basis.

What we would be looking for here is to fulfil a rollout of hardware in the department which is effected most, this quarter (remaining in budget) and allocating budget next quarter to the rest of the change, again department by department.

See how it works?

The moment you add data and numbers to how you operate, the easier it becomes to make a decision.

Those sleepless nights wondering about which one to do. The decision paralysis that causes you to not make a decision. The worry about spending money and choosing the wrong thing.

All of this vanishes with the right data. Instead of thinking about making the wrong choice, you’ll be thinking about what will give you the biggest return on investment.

And that is ultimately, the best way for you and the business to reach the targets set.