Making the Business Case for Investing in Your Learning Business

As learning business leaders, it’s inevitable that there will be times when you need additional resources. Whether it’s new staff, new technologies, extra contract help for a special project (the list goes on and on), getting those resources may not be easy. Very often you have to convince someone else—be it your boss, your board, or investors—that the resources really are necessary and that they will result in a positive return.

In this episode of the Leading Learning podcast, Celisa and Jeff discuss five points that will apply in almost all business-case-making situations to help you get the new and better resources that your learning business needs to succeed.

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[00:18] – Below is a message from NextThought, our sponsor for the third quarter of 2018.

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[01:14] – A note that we’re basing this episode off of a Content Pod session we did at our 2018 Learning • Technology • Design™ (LTD) virtual conference, so we thought it would be valuable to provide the slide deck from that session. It has some useful visuals and it may be helpful to have as point of reference in the future.

Making the Business Case Is Selling

[02:21] – To begin, we want to offer a kind of caveat.

We come at this from a perspective that may be a bit different than what you’d expect or typically hear.

We do occasionally have to make a business case to each other internally at Tagoras, but in most cases we are making a business case to a prospective client or helping the client make a business case internally. In either situation, what we are doing is selling.

And, our view is that—regardless of whether you consider yourself a salesperson—when you are making a business case you are selling. So, it is extremely helpful to know some of the techniques of selling.

With that in mind, we’re going to highlight some of the approaches and techniques we use and encourage organizations we work with to use. Once you know that making the business case is selling, then you have to know who is making the decision, what they care about, and why.

And figuring that out may require some footwork to figure out who makes the particular decision you’re selling towards, what motivates them, and why.

This is also a place where you want to be careful to check assumptions. On any of these three parts—who makes the decision, what they care about, and why—it’s all too easy to misstep.

You might think the decision-maker is the executive director or CEO, but it’s really the board or vice versa. Or maybe it’s not a board-level or even CEO-level decision, maybe the head of IT or HR or the VP of marketing has the ability to say yes to what you want.

Once you know who the decision-maker is, you can misstep on what they care about. It’s fairly common for us to ascribe our own emotions and motivations to others, but don’t assume the decision-maker cares about the same things you do.

Really put yourself in the decision-maker’s shoes and think about what they care about and look for evidence of what they care about—beyond what they might say they care about, what actions have you seen them take that show you what they care about?

And if you’re dealing with multiple decision-makers, which can be the case, then be aware that you may need to tailor your case for different individuals.

This is all by way of saying that there’s no single approach that will work across the board in all your business-case-making situations.

That said, we do have 5 points that will apply in almost all business-case-making situations—it’s just how you use or employ these that will vary based on the particular case you’re making and to whom.

Point 1: Always Look to Your Strategy

[05:10] –The key outcome of any well-formulated strategy is that it provides a  framework for making decisions. 

Creating a strategy narrows your choices and focuses you in on the activities that will most contribute to making progress.

Once the strategy is in place, it becomes a point of reference for all of the other choices you inevitably have to make in running your learning business. Whether you are making decisions about technology, or hiring, or which products to develop, or which marketing campaigns to run, you should always be asking does this action actually support our strategy.

If it doesn’t, you shouldn’t do it.

First, check to make sure the more or better resources you’re asking for jibe with the strategy. If they don’t, then you should abandon the request.

Assuming they do, then referencing the strategy is a powerful stance, as it highlights the common ground, the decision-making framework that you and the decision-maker share.

If you think in general about disagreements—and the need to make a business case often arises when there’s some level of disagreement, or at least a question, about what to spend on—they tend to be about the destination or goal or how you get to that destination or achieve that goal. Strategy helps on both counts.

Three Components of a Strategy

[06:54] – The three essential components of a strategy are: diagnosis, guiding policy, and coherent actions. (These terms come from Richard Rumelt’s work, in particular his book, Good Strategy, Bad Strategy).

1. Diagnosis– centers on the challenge and simplifies the complex by identifying the essential, critical aspects of a situation—what we have to pay attention to. In a diagnosis related to learning business strategy, the challenge often deals with competition and change.

Competition is about where else your learners go or can go for their education needs. Change is about the shifts that are inevitably occurring in the environment around you and tension that exists between where you are now and where you want and need to be.

So you create a hypothesis about what’s going to get you from where you are now, the present state where the challenge exists, to where you want to be, the future state, where the challenge has been dealt with.

2. Guiding policy– the response to the challenge identified during the diagnosis. How will we deal with the obstacles we know exist? A guiding policy provides the trajectory, the general path, for how to achieve the ideal future state. In a strategy for a learning business, the guiding policy usually builds on or creates leverage or advantage.
3. Coherent actions – designed to carry out the guiding policy. These are steps, coordinated with each other, working together, that accomplish the guiding policy. That idea of coordination is key. Without coordination—that is, without the work you’ve done to diagnose the situation and develop a guiding policy—you might be engaging in activities that dilute your efforts or, worse, work at cross-purposes.

So when making the business case for more or better resources, look to your strategy and clearly spell out how the new or better resources are consistent with the strategy.

Maybe the resources relate directly to the key challenge or challenges you identified in the diagnosis. Maybe the resources factor into the guiding policy, that response you’ve formulated for addressing the challenge you diagnosed. Maybe the resources are essential for making it possible to carry out one or more of the coherent actions you identified.

In a learning business strategy, the coherent actions usually deal with resource allocation and actions around product design, product development, and marketing and selling. And since your resources—namely time and money—are limited (even in well-heeled organizations resources are limited), it’s key to coordinate your efforts, so what you’re investing in is actually helping you with your strategy in as direct and targeted a way as possible.

So the need to make a business case arise when there’s some level of disagreement about what to spend time and money on, and as we mentioned, disagreements tend to be about the goal or how you achieve that goal.

But strategy—this kind of three-component strategy—helps ensure you and whoever has the power to deny or approve your request for new or better resources are on the same page about the destination—that ideal future state—and in agreement around at least the general plan for how you get there, i.e., via the guiding policy and coherent actions.

And the power of that strategic alignment can be significant, invaluable really, in making a business case for new and better resources.

Point 2: Nail Your OMV

[11:19] – The concept of paying careful attention to your OMV, or Objective, Measures, and Value, is based on a concept from Alan Weiss who is known as the “million dollar consultant” and for helping people write proposals that win. We have drawn on this for every single one of our own proposals over the past decade—and we’ll note that we have very high success rate on them.

We are very careful, in the first place, to make sure we have diagnosed the situation—which, as we just discussed, is a fundamental part of strategy—and understood the key objective or objectives that the decision maker seeks to achieve.

Sometimes this is clear, just depending on the situation and whether the strategy work has been done properly, but often it takes quite a bit of dialogue to draw out and focus on the objectives.

Once we have gone through that process and gotten clear agreement around the objectives, we develop metric or measures that we agree will demonstrate that the objectives have been achieved.

And then finally, we work to reach agreement around the overall value or impact that will result from pursuing the proposed initiative and achieving the objectives.

It’s important to emphasize here that this is not just a matter of tangible, financial value. You definitely need to be prepared with the appropriate financial projections to demonstrate a return on whatever you are proposing, but you also need to look at intangible and complementary value that will be produced.

For example, will your efforts help elevate the brand of the organization? Will they attract a historically untapped member or customer segment?

And, don’t just focus on value to the organization.

Are there ways in which the initiative will create value that is personally important to the decision maker? Will it support a pet project, for example? Or simply make the person look good?

The reason for doing all of this is to get to conceptual agreement before you ever ask for a firm commitment, before you ask for someone to say yes to the resources you’re requesting.

If you have agreed to the objective, to the measures, and to the value that will be generated, and the value is clear and desirable, then moving to a commitment becomes dramatically easier.

And we encourage really treating this like a proposal process.

Write it down; review it together. Have the decision maker actually engage in making edits to the objectives, measures and values as you state them.

When you do this, they become much more bought into the process, and much more bought into implementing when the time comes.

Point 3: Teach to Sell

[14:43] – The third point is to leverage teaching as your main selling tool. The reference we like to rely on for this approach is a book called, The Challenger Sale by Matthew Dixon and Brent Adamson.

The basis for the book is that Dixon and Adamson analyzed the performance data for a wide range of salespeople and classified these people according to characteristics that defined the selling method they tended to use.

Their work was focused on what is usually known as solution selling—so, selling solutions to relatively complex problems—similar to what anybody who is making a business case must do.

In their book, they identified five major types of salespeople: the hard worker, the relationship builder, the lone wolf, the problem solver, and the challenger.

We won’t go through the details of each, but the Challenger was by far the most successful type, and the key characteristic of this type of salesperson was that she uses teaching as her major selling technique.

She’s called a challenger because she’s not afraid to challenge the status quo and educate decision makers about how things can be different and better.

As Dixon and Adamson put it “the thing that really sets Challenger reps apart is their ability to teach customers something new and valuable about how to compete in their market.”

Obviously, this implies knowing the situation and capabilities of your organization extremely well and also knowing what the opportunities really are.

So, a key question to ask in preparing to make a business case is how well do you know these things? What kind of footwork do you need to do it, and once you have, what kinds of teaching situations can you create for helping to make your case?

Point 4: Pre-suade

[16:49] – Robert Cialdini, who has arguably done more than anyone else in the world to increase our understanding of influence and persuasion, tackles the topic of what he calls “pre-suasion” in his recent book, Pre-Suasion: A Revolutionary Way to Influence and Persuade.

Pre-suasion is built around the ideas of anchoring and priming.

Anchoring, also known as the focusing effect/focusing illusion, is an attentional bias that means we systematically rely too heavily on the first piece of information offered (the “anchor”) when making decisions.

Priming refers to how our attention and responses are systematically biased by what we’ve just been exposed to (exposure to one stimulus influences the response to another stimulus). Together priming and anchoring mean that whatever first captures our attention is seen as important, causal, and directs our response.

This information can be used in remarkably simple yet powerful ways. For example:

• If you want people to agree to an expensive purchase, first arrange for them to write down a number that’s much larger than the investment required.
• If you want people to improve performance, first expose them to images and words associated with performance (win, attain, succeed, master).
• If you want people to be more helpful to you, first have them look at photos of individuals standing close together.
• If you want people to agree to try an untested product, first inquire whether they consider themselves adventurous.

Now Cialdini isn’t saying, and neither are we, that pre-suasion is magical.

Using it definitely does not guarantee that you will win over your audience, but the odds are pretty good that pre-suasive tactics will help your cause. So, if you are really serious about making your case, definitely take some time to understand pre-suasion and the techniques it suggests.

Check out our interview with Robert Cialdini on the topic of pre-suasion.

Point 5: Follow Through With Influence

[19:15] –You’ve used logic and argument in the earlier points—especially in looking at strategy and nailing the objectives, measures, and value—and you’ve begun to teach and pre-suade.

This final point really drives home that you need draw not only on logic, reason, and well-structured arguments when making your business case, but also on psychology, specifically the psychology of persuasion and influence.

Which leads us back to Robert Cialdini and in particular to his book, Influence: The Psychology of Persuasion.

Through a lot of research, literature review, and hands-on experimentation—he spent time “undercover” as a door-to-door vacuum salesman—Cialdini arrived at six principles of influence—and you can draw on one or more of these principles when making your business case for more or better resources.

Six Principles of Influence:

1. Reciprocation – the impulse to repay in kind what another has provided us. This is why organizations send us calendars or mailing labels when asking for a donation. Think about who you’re making your business case to and think about what you can do to help them. Helping them will make them more likely to help you.
2. Commitment and consistency – We have an innate desire to appear consistent with our previous actions. In addition to the strategic alignment that the first point, look to strategy, ensures, it also plays on this principle. If the decision-maker agreed on the strategy, and you have shown how the ask you’re making ties to the strategy, then the decision-maker is going to want to support the request because it’s consistent with their past behavior.
3. Social proof – gets at the human tendency to look to others to confirm what is correct or acceptable. Especially if you’re dealing with a group of decision-makers, not single individuals, you can leverage this principle; as you start to get buy-in from some folks, you can use that to enlist others.
4. Liking – we have a strong inclination to engage positively with people we like. One way this might play out in making the case for new resources is by being aware of personal dynamics. If you and a decision-maker don’t have the best relationship, maybe you can involve a colleague who has a better relationship in making the case.
5. Authority – we, as humans, have a compulsion to conform to the demands authority. Even if the decision-maker has more authority in the context of your organization than you do, you can still use authority. If you’re asking for more resources improve your approach to evaluation, go find some of Will Thalheimer’s research and writing and use that—check out our interview with Will Thalheimer to learn more. Go to the experts, the authorities, in whatever domain you’re asking for resources in, and use what they’ve written, said, or researched to make your case.
6. Scarcity– we tend to view something as more valuable when its availability is limited. This is what drives “limited time only” and “limited supply” claims. And you may be able to use something like the first-mover advantage type.

Those are just some ideas of how you might apply these principles to making the case for new and better resources, but there are certainly others. So think through these principles with your specific case in mind—and your decision-maker and their motivations in mind too.

Again, you don’t have to use all six when making a business case, but plugging in even one can help inform how you go about making the ask for new and better resources and produce a more persuasive result.

[23:59] – Wrap Up

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[27:18] – Sign off

See Also:

• Rethinking a Dangerous Art Form with Dr. Will Thalheimer
• Pre-suaded to Learn with Robert Cialdini
• Free Tools and Resources for Your Lifelong Learning Business