How to Understand the ROI of Investing in People
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Using Employee Lifetime Value to articulate ROI
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How to Understand the ROI of Investing in People
- 1. How to Understand the ROI of Investing in People U s ing Employee Lifetime Value to artic ulate ROI Lauren Ryan Senior Director of Growth Marketing, Greenhouse @_LaurenRyan_
- 3. R O I I S H A R D E R T O M E A S U R E W I T H P E O P L E
- 4. M O S T C O M P A N I E S D O T W O T H I N G S Ctrl C Ctrl V+ Copy others Underinvest
- 5. YEAR 2 100K YEAR 1 50K Marketing leads per year
- 6. Q1 1 Year Q2 Q3 Q4 P R O D U C T R O A D M A P P L A N
- 7. 6 Months P R O D U C T R O A D M A P P L A N Q1 Q2 Q3 Q4
- 9. Too many variables Too subjective Difficult to assign value to people T H E C A L C U L A T I O N P R O B L E M
- 11. ELTV model Put it into action Compare two scenarios Framework H o d i e O r d o F I G N º 0 1
- 12. TIME -6 -4 -2 0 2 4 6 8OU TPUT T H E E M P L O Y E E L I F E C Y C L E Start Fully contributing Decision to leave Last day ELTV
- 13. TIME -6 -4 -2 0 2 4 6 8OU TPUT R A I S I N G T H E B A R How quickly they ramp
- 14. TIME -6 -4 -2 0 2 4 6 8OU TPUT R A I S I N G T H E B A R How high someone can go How quickly they ramp
- 15. TIME -6 -4 -2 0 2 4 6 8OU TPUT R A I S I N G T H E B A R How high someone can go How much higher they go over time How quickly they ramp
- 16. TIME -6 -4 -2 0 2 4 6 8OU TPUT R A I S I N G T H E B A R How high someone can go How much higher they go over time How long they stay How quickly they ramp
- 17. TIME -6 -4 -2 0 2 4 6 8OU TPUT T H E E M P L O Y E E L I F E C Y C L E How high someone can go How much higher they go over time How long they stay How quickly they ramp
- 18. TIME -6 -4 -2 0 2 4 6 8OU TPUT T H E E M P L O Y E E L I F E C Y C L E How high someone can go How much higher they go over time How long they stay How quickly they ramp Onboarding Hiring Management & Development Management & Culture
- 20. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONTH N ET R EVENUE (1,000s) A S S U M P T I O N CASE 1 6 months to ramp and consistently hit quota A better onboarding program can decrease ramp time by 30%1 CASE 2 4 months to ramp and constituently hit quota 1. Organizations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%. (Brandon Hall, The True Cost of a Bad Hire, 2015) O N B O A R D I N G
- 21. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONTH N ET R EVENUE (1,000s) A S S U M P T I O N CASE 1 6 months to ramp and consistently hit quota CASE 2 4 months to ramp and constituently hit quota A better onboarding program can decrease ramp time by 30%1 1. Organizations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%. (Brandon Hall, The True Cost of a Bad Hire, 2015) O N B O A R D I N G Case2: Fully ramped in 4 months Case1: Still ramping 4 months in
- 22. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONTH N ET R EVENUE (1,000s) A S S U M P T I O N 1. A study from the Boston Consulting Group shows that recruiting is the HR function with the highest impact on revenue. Excellent recruiting practices contribute to more than 3x revenue growth and 2x profit margins. A better hire can outperform a peer by 20%1 CASE 2 Consistently surpasses monthly sales quota by bringing on $60k per month Consistently hits $50k per month sales quota CASE 1 H I R I N G
- 23. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONTH N ET R EVENUE (1,000s) A S S U M P T I O N 1. A study from the Boston Consulting Group shows that recruiting is the HR function with the highest impact on revenue. Excellent recruiting practices contribute to more than 3x revenue growth and 2x profit margins. A better hire can outperform a peer by 20%1 CASE 2 Consistently surpasses monthly sales quota by bringing on $60k per month Consistently hits $50k per month sales quota CASE 1 H I R I N G Case 2: 20% more sales
- 24. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONTH N ET R EVENUE (1,000s) A S S U M P T I O N 1. Companies that hire managers based on their management skills saw a 48% increase in profitability. (State of the American Manager, Gallup, April 2015) Great management and development practices can improve an employee’s performance by by 20% in a year1 CASE 2 Goes from $60k in monthly sales to $72k in monthly sales in year 2 Continues to hit $50k per month sales quota CASE 1 M A N A G E M E N T & D E V E L O P M E N T
- 25. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONTH N ET R EVENUE (1,000s) A S S U M P T I O N Great management and development practices can improve an employee’s performance by by 20% in a year1 CASE 2 Goes from $60k in monthly sales to $72k in monthly sales in year 2 Continues to hit $50k per month sales quota CASE 1 1. Companies that hire managers based on their management skills saw a 48% increase in profitability. (State of the American Manager, Gallup, April 2015) M A N A G E M E N T & D E V E L O P M E N T Case 2: 20% increase in sales in year 2
- 26. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONTH N ET R EVENUE (1,000s) A S S U M P T I O N 1. 36% of people switching jobs left because they were “unsatisfied with the work environment / culture” of their previous employer. (Why and How People Change Jobs, LinkedIn, 2015) A great culture, coupled with good management, can increase employee tenure by one year1 CASE 2 Continues to thrive for another year Starts to look for a new job 20 months in; leaves after 2 years CASE 1 C U L T U R E & M A N A G E M E N T
- 27. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 36 MONTH A S S U M P T I O N 1. 36% of people switching jobs left because they were “unsatisfied with the work environment / culture” of their previous employer. (Why and How People Change Jobs, LinkedIn, 2015) A great culture, coupled with good management, can increase employee tenure by one year1 CASE 2 Continues to thrive for another year Starts to look for a new job 20 months in; leaves after 2 years CASE 1 C U L T U R E & M A N A G E M E N T N ET R EVENUE (1,000s)
- 28. P U T T I N G I T A L L T O G E T H E R : 3 - Y E A R O V E R V I E W -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 MONTH N ET R EVENUE (1,000s)
- 29. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 MONTH N ET R EVENUE (1,000s) P U T T I N G I T A L L T O G E T H E R : 3 - Y E A R O V E R V I E W $1,300,000 2.5x
- 30. O T H E R U S E C A S E S Mis-Hire Engineer
- 31. -10 0 10 20 30 40 50 60 70 80 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 MONTH M I S - H I R E N ET R EVENUE (1,000s)
- 32. -25 0 25 50 75 100 125 150 175 200 225 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 MONTH FEATURES SH IPPED A D A P T I N G T O O T H E R R O L E S : W H A T A B O U T E N G I N E E R S ?
- 33. -25 0 25 50 75 100 125 150 175 200 225 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 MONTH A D A P T I N G T O O T H E R R O L E S : W H A T A B O U T E N G I N E E R S ? PR ODUCT FEATURES SHIPPED
- 34. -25 0 25 50 75 100 125 150 175 200 225 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 MONTH A D A P T I N G T O O T H E R R O L E S : W H A T A B O U T E N G I N E E R S ? PR ODUCT FEATURES SHIPPED
- 35. Winning People Practices lead up to a 6x increase in Employee Lifetime Value.
- 36. Getting everyone bought in F r u c t u s L a b o r i s F I G N º 3
- 38. TIME -6 -4 -2 0 2 4 6 8OU TPUT Start Fully contributing Decision to leave Last day ELTV R E V I S I T I N G E M P L O Y E E L I F E T I M E V A L U E
- 39. TIME -6 -4 -2 0 2 4 6 8OU TPUT R E V I S I T I N G E M P L O Y E E L I F E T I M E V A L U E Hiring a better person Hiring a person more suited for the job ROI
- 40. E X A M P L E Proposal Template G R E E N H O U S E P R O P O S A L Situation Analysis W h a t ’ s t h e c u r r e n t s t a t e o f t h i n g s ? U s e d a t a a n d i n f o r m a t i o n f r o m y o u r c o m p a n y a n d s u p p o r t i n g d a t a f r o m e x t e r n a l s t u d i e s . Proposed Solution H o w d o y o u ‘ c o m b a t ’ t h e p r o b l e m , o r l e v e r a g e t h e o p p o r t u n i t y ?
- 41. E X A M P L E Proposal Template 110 5th Ave 3rd Floor New York, NY 10011 Return on Investment I n v e s t m e n t r e q u i r e d a n d b u s i n e s s i m p a c t . e x t e r n a l s t u d i e s . Proposed Solution H o w d o y o u ‘ c o m b a t ’ t h e p r o b l e m , o r l e v e r a g e t h e o p p o r t u n i t y ? Obstacles, Challenges and Open Questions N o p l a n i s f r e e f r o m o b s t a c l e s . B e u p f r o n t a b o u t w h a t t h o s e a r e .
- 42. E X A M P L E Proposal Template G R E E N H O U S E P R O P O S A L Situation Analysis Our recruiting process is not currently set up to make data-driven decisions. Because of this, hiring managers often have to rely on gut-feel when making hiring decisions. • At [OUR.CO], the Recruiting Team has no easy way to track basic recruiting metrics like Days to Offer or Candidate Satisfaction • At [OUR.CO], 15% of new hires are classified as ‘not the right fit for the job’ at their 6-month check-in • A study by the BCG group showed that excellent recruiting practices contribute to more than 2x profit margins • Industry studies show that hiring decisions based on gut-feel are more likely to be influenced by unconscious bias, which adversely impacts a company’s Diversity & Inclusion initiatives
- 43. E X A M P L E Proposal Template G R E E N H O U S E P R O P O S A L Proposed Solution Transform the recruiting process to facilitate evidence-based and data-driven decisions. • Develop a set of Recruiting KPIs to send to all stakeholders at a regular cadence. Set goals and targets around the KPIs and communicate progress. • Hire a Data Analyst to develop recruiting reports, analyze metrics, and recommend continuous optimizations on the recruiting process. • Create ‘offer packets’ to share with Department Heads before approving offers. Offer packets should include all feedback and scorecards submitted about the candidate.
- 44. E X A M P L E Proposal Template G R E E N H O U S E P R O P O S A L Return on Investment Investment required • Data Analyst to manage initiative ($60k/year) Business impact By using data to inform process improvement and hiring decisions, we can make a significant impact on the employee lifetime value (ELTV). Specifically: • Increase quality of hire • Increase percentage of employees who stay past 6 months
- 45. E X A M P L E Proposal Template G R E E N H O U S E P R O P O S A L Obstacles, Challenges, & Open questions Like with any data project, the first step will be ensuring data integrity. It is likely that our data is not complete enough to report on as-is and will need an extensive “data clean-up” before we’re ready to start reporting regularly. The program will need hiring manager buy- in. In order to create offer packets and track all of the data, interviewers will have to input their feedback in a timely manner. Hiring manager support in this initiative will be very helpful.
- 46. G R E E N H O U S E P R O P O S A L Return on Investment I n v e s t m e n t r e q u i r e d a n d b u s i n e s s i m p a c t . Situation Analysis W h a t ’ s t h e c u r r e n t s t a t e o f t h i n g s ? U s e d a t a a n d i n f o r m a t i o n f r o m y o u r c o m p a n y a n d s u p p o r t i n g d a t a f r o m e x t e r n a l s t u d i e s . Proposed Solution H o w d o y o u ‘ c o m b a t ’ t h e p r o b l e m , o r l e v e r a g e t h e o p p o r t u n i t y ? Obstacles, Challenges and Open Questions N o p l a n i s f r e e f r o m o b s t a c l e s . B e u p f r o n t a b o u t w h a t t h o s e a r e . E X A M P L E Proposal Template
- 47. Employee Lifetime Value Onboarding, hiring, management, development, &culture Relative value vs absolute numbersTakeaways H o d i e O r d o F I G N º 0 1 Small improvements can have a 6x return on ELTV 4 Frame proposals as ELTV business cases 5
- 48. G R E E N H O U S E . I O
Hinweis der Redaktion
- Hi, I’m Lauren I’m the Sr. Director of Growth Marketing at Greenhouse, and before that I led our Talent Acquisition team. And I’m excited to talk to you about crafting a compelling ROI business case for people - warning: there’s going to be math. I promise it’s not too tough, but I hope we all had a little coffee.
- My first job out of college was at a healthcare consulting firm. We would help our clients get better rates on their insurance contracts. When we were selling the projects, we’d be able to tell potential clients pretty concretely how much more money they’d make next year, and just charge them a little bit less than that. Turns out that’s the easiest type of consulting project to sell, because the ROI is really clear and easy to communicate. Then, I went to bschool. And, though the ROI on that decision is a bit murkier, the concept of how to look for and demonstrate ROI was really drilled in. And then when I found myself as the head of recruiting and I started to try to apply ROI logic to the people world.
- The approach to demonstrating that a return is bigger than investment happens all across business, its how we make decisions. But when it comes to people practices, ROI gets pretty tough to calculate and we end up with a sort of “fuzzy math” The investment, or cost, is pretty straightforward. We’re usually asking for money or time. We ask for people, programs, software, trainings, etc. But we really struggle with figuring out the return part of the equation. And that means we end up with known cost, unknown return, and businesses typically don’t do that well with uncertainty. And it puts us as a People function at a disadvantage compared to the rest of the business.
- In response to that fuzzy math, most companies do one of two things Anything (they copy what other companies do, essentially copy/pasting vision/strategy from other companies onto their own), without understanding what the ROI is for their org A great example of this is the perks war we see at tech companies. OR: Nothing! (they under-invest in their people). And, I will say, it’s easy to underestimate how much you can get by investing in People practices So lots of companies understaff their People functions or wait too long to build it out. Neither solution results in a good ROI
- How do other parts of the business do it? If you look at what marketing does, they said “I’ve been delivering 50,000 leads per year at some specific budget. But I have (with a new software) a way for us to do 100,000 leads. And, the software is cheaper than what we spent for the first 50, and the what does the exec team say? “do it.”
- Let’s try another one How many of you are tech companies, where a lot of your hiring is for engineers What if the CTO said… You know that 1-year product roadmap we’ve all committed to? Guess what? With 2 extra hires to add to my management layer, I can.. [slide]
- My team can finish it in half the time. Yes, the whole 1-year development roadmap, we’ll do it in 6 months. What would the reaction be? The executive team would probably (a) be ecstatic, and (b) give a little extra investment, right? Of course they would.
- HOW How do we have those conversations? What is our story for the return I’m going to provide, if you give me this investment? It’s about getting past this fuzzy math – getting past the known cost, unknown return. What we need to do is understand the ROI of our efforts. [SLIDE] Here’s an idea I’m sure many of you have heard of Customer LTV? Common business term, we use it all the time. There’s a view of that for employees as well. There’s a certain lifetime value that an employee brings to your organization, and our job is to drive that, to increase that, to prove that our investments are working. [SLIDE] It helps us ask the $100,000 questions instead of the $1000 questions
- The reason it hasn’t happened yet is pretty straightforward. It’s really hard to calculate this. For a few clear reasons. [SLIDE] First, it’s very difficult to assign a concrete value to a human being and their impact on your company What do you do for an engineer? Is it lines of code? Most CTOs would kill me if I said that. Features shipped? [SLIDE] Too many variables (choosing what to measure) Ok, you can assign a revenue number to a sales person. But, what about the other contributions? How someone improves the culture? What they do outside of their day job? If they help the rest of the team? [SLIDE] Too subjective (how to measure it) Basically, any output that is qualitative. All companies have that - like think about your legal team – unless you get sued and you can test the quality of your contracts, how do you know your contracts are good? You have to qualitatively decide your contracts are good. Those hurdles are real, and not what I intend to solve in this room with you today. But we wouldn’t be hosting this webinar today if I didn’t have an answer for you.
- I have a solution. Forget cacluating. We don’t have to calculate to be able to crack the code. We don’t need to equation that tells us that someone is an 8.2 ELTV compared to a 12.5 Instead, we can compare. [SLIDE] And that’s what we’re going to talk about today. So far, Since we don’t trust our calculations, we don’t do anything to measure, and thus, don’t get to a good ROI It’s pushed all of us to think very tactically about people we avoid the strategic conversation about ROI altogether So let’s crack that code today - Let’s do some measuring (comparing) And let’s talk about how to have this conversation with our executive teams Two ways you can demonstrate impact. Have numbers and measure the impact. Eg. Marketing leads. New number of leads. You can’t do that, you can illustrate how far you’ve moved. Show a base case. Comparing where you start from to where you end up.
- So, in that context, here’s how we’re going to spend our time: Articulating return on engagement Comparing return on engagement -> by mapping out the employee lifecycle. And doing some math together. Changing it / moving the levers / impact. Creating impact Making the case My goal is for you to be able to do this reliably at your company and not just leave with a theory you aren’t sure how to implement. We’ve been using this internally, we’ve used it with some of our customers. I don’t think it’s perfect yet, so I’d love your feedback. As you start to use this, tell us what worked, and let’s make it better together.
- [introduce axis – I have numbers here, but don’t get too hung up on them. The numbers don’t mean much except that they go from negative to positive, and increase. First let’s simplify the equation a little We can break the employee lifecycle into four distinct gates (Less emphasis on the four gates, more on the variables). We’ll look at a very generic, boring employee journey. [SLIDE] Start date (note on why “start” date is negative) [SLIDE] Fully contributing member [SLIDE] Decision to leave (lots of random doctor appts in the same 3 weeks) [SLIDE] Last day And the area under this curve (the integral, for math people) is the Employee Lifetime Value. Any improvement we make to this curve, at any of these points, will change the ROI. Now, let’s understand the variables in this equation. [talk through this]
- There are a few ways we can start to growing this area under the curve: Decrease the time it takes for them to ramp to fully contributing member. If they ramp faster, there’s less time they aren’t productive, so more output in a similar period of time.
- How high someone can go naturally >> this is quality of hire
- How much higher they can go over time with the right inputs
- How long they stay
- The whole area is your new ELTV The green is your incremental. That’s the ROI that we’re trying to capture. That’s the return. That’s how much better you can be when you’re good at impacting these variables.
- And you can loosely map these to distinct people practices. [SLIDE] It’s a loose map – I’d argue culture impacts all of these Why Hiring is after Onboarding is a little counter intuitive. Hiring comes second because how high someone can go is impacted by quality of hire. Anyone ready for math? We’re going to walk through a hypothetical case study of 2 companies and see how this plays out over time with different scenarios. There are two scenarios – Company 1 has fine, normal people practices. Company 2 is a little bit better people practices. We aren’t comparing extremes, because the point I want to stress is that even modest improvements can really increase your ELTV, so I don’t want to compare Michael Jordan and middleschool basketball player. And something else before we move on. Our team did a lot of research aggregating all the different papers and studies that could help back up the assumptions we’ll make. And I’ll say the data is helpful & directional, but we noticed there isn’t nearly enough good People data. So let’s all push for htat.
- Now for the math part. Let’s put numbers to all of this. Sales person: $60k/year salary -> $5k /mo Quota: $600k yearly quota -> $50k /mo
- I’m going to make some conservative assumptions. Remember, we’re making conservative assumptions here. [reference data on the slide]
- The base case is a good person. They’re hitting quota. And we’re only looking at someone who does a little better -- $60k per month. And it starts to really add up.
- Let’s review the assumptions we made: Case 2 vs Case 1 -30% faster ramp -20% higher sales in year 1 -10% increase in output after year 1; 15% after year 2 -2x tenure So – remember that original graph? With the grey and the blue and the difference was the gain in ELTV. The difference between the two there show a pretty big difference. Take a second, and think about what dollar amount you’d guess is represented by that blue area.
- Using incredibly conservative estimates, we came to a $1.3million dollar difference over 3 years with JUST ONE HEADCOUNT 2.5x difference in our two scenarios Let’s play out a few more… Even if we were wrong on our assumptions – one was 10 or 15% instead of 20%...it wouldn’t quite matter. There’s still a HUGE return over time. So – being a little better at people practices can mean the difference of 1.3m per sales person. With a 20 person sales team? You’d probably want to get a get a pretty big budget, eh?
- Now we’ll go through two more scenarios – One where we mis-hire a sales person And one where we look at how to do this for an engineer instead of a sales person
- So now, let’s take a look at the same sales person, but the we mis-hired the backfill and had to let them go a month later, and restart the search. What does it cost when we mis-hire? This model shows 3.5x
- In that last example we made the assumption that the difference between a great salesperson and an okay one is about 20% What about software engineers? Let’s change our Y-axis to lines of code… 20% can make the difference between a great salesperson and an okay one In engineering, they talk a lot about how big a difference a great engineer is – some studies have even floated out 10x. I don’t know if that’s true, and I don’t necessarily want to make that argument. Let’s look at what happens if a great hire is just a twice as good
- 4x Eltv over the course of three years
- If they’re 3x as good, it’s a 6.2 ELTV increase over the course of 3 years. Put another way, over three years, one engineer can have the same impact as 6 engineers.
- That’s a tremendous impact we can have on the business. It impacts how many leads you bring it, how quickly you ship product, how supported your customers feel, etc.
- 6x is one thing. It’s sort of academic, theory based, but maybe not that actionable. What’s next? Making the case to your executive team comes next. Because, for an People practice you need either budget or buy-in to be successful
- Typically, the conversations we hear about with the exec team go like this… Don’t have enough people, we’re swamped, need to hire more… [etc.] When I first started leading the recruiting team, everyone was swamped. It felt frantic, and unsustainable. I kept just relaying that fact to our VP, and saying that we “needed help,” but didn’t get far. The second time, I aimed her with some facts on how long we’d be pushing out key hires without support. The answer came a lot faster that time.
- First let’s simplify the equation a little – you’ll want to start by walking everyone through the curve, and what these points mean. We can break the employee lifecycle into four distinct moments Start date Fully contributing member Decision to leave Last day Now, let’s think about these less as moments as more like variables. Most initiatives will impact just one of these points, but any improvement we make to this curve, at any of these points, will change the ROI Now, let’s understand the variables in this equation. [talk through this]
- My suggestions, don’t try to move all at one. Pick one (or two). And articulate a theory of how you’re going to impact ELTV. Focus on the magnitude of that impact, rather than the discrete impact itself. At Greenhouse my scenario was hiring key roles across the organization. With People practices, it’s about the impact on the ELTV curve. That green area was what I was looking to create, and what I would point to when modeling out my team.
- Define the problem. Illustrate the painpoint you’re going to solve. Coming just with the solution, means they don’t have the context to understand how brilliant your solution is. In order for an executive to wrap their head around why CHANGE is needed, they had to feel the pain. Use data. Internal data -> stats about your current situation in your company. External data -> Lots of studies that demonstrate the ELTV impact. Don’t try to convince anyone of anything, SHOW them. It’s hard to argue against data.
- Business impact – don’t worry about calculating. This is where the comparison models we walked through will be handy. Challenges is the part people don’t like to share. It’s probably not your first instinct to come in with all of the holes of your proposal. Let me tell you why you should do it anyway. When you hand someone a business proposal, they will look for the obstacles and things that go wrong. By sharing them up front, you have the opportunity to own the story, and get in front of the conversation. This process lends you and your proposal a lot of credibility. Plus, you’re proposing something that’s great for the business. And by articulating these problems, you’re bringing people on board to help solve them with you.
- INTERACTIVE EXERCISE Let’s try this together… [SLIDE FOR EXAMPLE}
- INTERACTIVE EXERCISE Let’s try this together… [SLIDE FOR EXAMPLE}
- INTERACTIVE EXERCISE Let’s try this together… What would we list as the “investment required” and the “business impact” [SLIDE FOR EXAMPLE}
- INTERACTIVE EXERCISE Let’s try this together… [SLIDE FOR EXAMPLE}
- That script walked us through the entire proposal template Follow that and you’ll be speaking their language
- Let’s recap just a few of the big points from today