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This article is a reprint from the Illumination eZine on Medium.com
Psychology professors know it…Marketers know it…Sales people know it…Politicians know it…Heck, we all know it…All humans are gullible! Including me… and including you!
Just think about it: around 30% of the world’s population identify as Christians. That means that Christians would agree that 70% of the world are gullibly wrong about a pretty fundamentally important issue. Muslims (25% of the world) would think the other 75% of the world’s people are gullibly wrong; Hindus 85%, and; atheists would think that almost 90% of all humans are gullible. So a Christian, a Muslim, a Hindu and an Atheist might walk into a bar and disagree about many fundamentally important things. But they would all agree that the vast majority of humans are gullible because they would all agree that the majority of humans have allowed themselves to be duped about at least one “really important thing”.
So if the majority of people can be hoodwinked into displeasing the universe’s most powerful being(s) (or spending a lot of their time trying to please a non-existent one — a nod to the atheists there), then what else can us humans be hoodwinked into believing? And if so many can be hoodwinked into believing false things, then what real-world consequences are there for this “mass gullibility”?
Throughout most of history, the majority of humans have believed some true whoppers despite little to no evidence. Most humans believed the earth was the centre of the universe; almost no-one thought the earth was a globe and, instead, believed it flat with edges; white Europeans believed they were a superior race; many thought that evil spirits caused sickness and could be drained from the body through blood letting; almost everyone believed in magic and that there existed practitioners of magic like witches and shamans. No evidence…doesn’t matter.
Unfortunately reality does not care a whit about what humans believe or disbelieve: The pollution will spread where the wind blows; the fresh water will simply flow to the next lowest point; the contagious virus will leap from host to host; the sun will shine all the spectra, both the harmful and the helpful; carcinogens will interact with the body’s cells and the natural resources will simply run out when there’s no more left. So acting based on an accurate understanding of reality is a fundamentally important thing to do in a great many situations. Climate change, natural resources, pollution, economics, politics, science, engineering and many other spheres of human life; these are hard enough when we have access to all the facts. But when we are acting with incorrect information (especially if we sincerely believe it’s true), our chances of achieving good outcomes are greatly diminished.
Worse still, what if nefarious individuals decide to deliberately abuse our penchant for gullibility by convincing us of untruths for their own benefit? Perhaps they could peddle false stories like “that evil country has weapons of mass destruction, we need to invade” or “smoking our cigarettes doesn’t cause lung cancer” or “putting extra money in the hands of the job-creators through tax cuts will grow the economy and benefit everyone who works” or “taking our patented drug will modify this number which means you are less likely to get a bad disease; that’s much easier than exercising and giving up fast food ”. There is big money to be made by taking advantage of our innate human gullibility!
In politics it is even worse; What people believe to be true, actually is more important than reality. If a politician can convince voters that something is true that makes those voters more likely to vote for the politician, then whether that something is actually true is unimportant. Once a politician realises how gullible humans (and therefore voters) are, they realise they can simply make things up; “there is a caravan of armed enemies about to invade our country and the other political party wants to welcome them in” or “there are not thousands dying from that pandemic, they are just dying of normal causes”. Then the gullible human voters will vote based on their mistaken beliefs, potentially achieving the opposite to what they intend their vote to achieve.
But each of us individuals does not have enough time or expertise to check every single thing out. We are forced to rely on trusted others to verify what we cannot. And this creates yet another opportunity for the nefarious. Corrupt the trusted… and you get lots of people believing what those trusted people are telling them. We used to trust journalists…they were so ethical they would go to jail rather than reveal their sources, and some would even risk being murdered (and some even were) to get the truth out.
But in 2016, Professor Benkler of Harvard Law, found that 60% of statements on Fox News are either entirely or mostly false and an earlier 2011 study by Fairleigh Dickinson University showed that Fox News viewers believed more falsehoods than any other surveyed group, including people who watch no news at all! This becomes more important when it’s noted that Fox News is currently the most watched Cable News channel in the US, and has been for years.
We all trusted scientists and doctors. But more and more of them are working directly or indirectly for self-interested profit maximising corporations. How do we know when they are telling us the unvarnished results of unbiased scientific research and when, instead, are they twisting the message or the research itself to benefit their benefactors? Dr Ben Goldacre outlined a myriad of ways that seemingly independent scientific studies and publications have been corrupted and Stanford Professor John Ioannidis concluded in 2017 that medical practitioners are still treating patients as if all research was uncorrupted. Our local doctor is gullibly trusting “The nefarious and the corrupted” on our behalf.
Should we just give into the forces of self-interested falsehood tellers? Are we all just gullible sheep awaiting our inevitable fleecing? Or are their things us individuals can do to stop ourselves being taken for a ride? And what should we as a society do to limit the costs of “mass gullibility”? I have some suggestion for both us as individuals and for society as a whole in subsequent articles to follow in this series of Mass Gullibility articles.
About The Author
Jeff Popova-Clark (our Founding partner) has just published another fascinating article on LinkedIn. It is an investigation into why its so hard to pin down a mortality rate for COVID19.
Working out what remuneration someone is worth is of enormous interest to both employers and their people alike. But what are the key ways to determine the appropriate compensation for the contribution of current and potential future contributors to an enterprise. I thought I’d jot down some of the main approaches to work out that elusive number:
- Market value approach: what do persons who do that type of role generally receive for performing that kind of work or what does the market think that person is worth. Essentially what is the market rate for that type of work or for the individual in question. This is a common approach for commodified positions in the private sector and for individuals who are well-known in their industry.
- The marginal utility approach: if the person is undertaking their role to the standard expected, what extra revenue/profit/gross margin will the enterprise achieve over and above what the enterprise will achieve if the person was not undertaking their role. This value can change over time based on variations in market conditions and on the performance of other roles in the enterprise. An example may be the remuneration of a football player. If the football player is so good that the club is much more likely to win a football game and attract more fans to watch the game, then they are worth a significant amount based on marginal utility.
- Equal share approach: if the surplus value being created by the enterprise is shared equitably around the firm amongst the people responsible for achieving that surplus value, then this is a fair compensation for that contribution. So if the value add is $1M per annum over and above other input costs (including return on equity), and 10 staff helped achieve that value add, then everyone should receive $100K. This is more often used for bonus calculations, but is nonetheless, part of an individual’s remuneration.
- Company value delta: what is the increased value of the enterprise in the market if the individual is in the role as opposed to if the individual is not in the role. Some CEOs are valued based on this concept, where the value of the company is increased because the market believes this CEO will improve the performance of the company or bring a loyal book of established clients. Therefore the CEO is worth a proportion of the net asset value delta of the company with him/her vs the value without him/her.
- Compensation for investment approach: how much would a person have to have invested in their education/certifications/experience to have been capable of undertaking the role and what is a fair compensation for that. For instance, some medical specialities require over 10 years of tertiary studies to achieve a level of education and expertise to be able to function autonomously. This level of investment leaves less career lifetime to earn and therefore requires higher compensation to make up for the level of prior investment made by the position holder/candidate.
- Optimise churn approach: what level of compensation is sufficient to deter an incumbent from choosing to go elsewhere. This can even be below market rate, as there is a cost to change employers that incumbent staff may factor into their decision to quit to start with a new employer who may be paying the higher market rate.
- Attract the best approach: what remuneration is likely to attract, retain and motivate the best people who are more likely to contribute more to the enterprise’s success. This may be a “set the tone” approach which says that a high performing culture is the expectation and that the enterprise attracts and retains the best, and appreciates the added value the best bring to the enterprise.
- Lifetime value approach: as opposed to viewing a person in their current role or the value they are currently contributing, this approach looks at the value add of a person over the lifetime of their tenure with the enterprise. This looks at the person’s potential to add value both now and into the future. This approach decides what is the right remuneration to remit as a function of their expected lifetime value to the enterprise. Some individuals who are being groomed for future leadership positions may receive more remuneration than their current role or value might justify.
- Seniority approach: the key here is the current size of the budget, the current delegated authority, the current number of staff and the general seniority of the position held. This is common in the public service where marginal utility or market rates can’t be determined easily.
- Length of Experience approach: the key here is how long the person has held the position or has worked in the enterprise. The theory is that more experienced incumbents are more likely to contribute more than the less experienced. Once again this is common in the public service.
- Industrial Award approach: based on the pre-negotiated industrial award, pay what is specified in the award for an incumbent in a particular position. Depending on the power-relationship between the negotiating parties, award rates may be a little above market rates. Essentially a union is likely to try and capture more of the enterprise’s surplus for the workers out of the owner’s capital return. Unions do have a vested interest in maintaining the continued operation of major employers.
- Incentive approach: what level and structure of compensation will incentivise the person to perform at a high level adding further value to the company than an unmotivated incumbent, whilst encouraging them to stay with the company to continue contributing.
- The perceived-by-peers fairness approach: what would the majority of the person’s work colleagues believe is fair compensation for the work they do, the effort they put in, the sacrifices they make and the contribution they make to the success of the enterprise
- The perceived-by-incumbent fairness approach: what would the person themselves feel is a reasonable compensation for the work they do, the effort they put in, the sacrifices they make and the contribution they make to the success of the enterprise. This can be impacted by the incumbent’s knowledge of the remuneration of others.
- Past achievement approach: how much better did the organisation do last year/period as a result of the contribution made by the incumbent. Once again some CEO’s claim responsibility for the increased revenue/profit/gross margin from the previous year/period and claim that they are worth a proportion of that increase.
- Compensate for opportunity cost: how much could the person have earned if they were investing their time, expertise and effort elsewhere? This is commonly used by headhunters where they offer a potential recruit at least a bit more than their current remuneration to attract them to give up their current role.
- Minimum allowable approach: some enterprises will try to minimise remuneration to the lowest allowable by law. This is common when the labour market is a buyers market, with plenty of alternate labour available to replace the leaving of any incumbents and when the expertise and skill required to undertake the role is very low.
- Hardship compensation approach: How much hardship, danger or sacrifice is required to undertake the role and what is a fair compensation for the sacrifices required to undertake the role. The role may be based in a remote location, or require unusual hours of attendance, or be particularly physically demanding or emotionally traumatising (e.g. mercenary work).
- Key contribution approach: a person may have an idea or piece of intellectual property upon which the unique differentiation of the business model relies. This person could have taken their IP to elsewhere but chose to contribute that unique differentiator to the enterprise. In recognition of that unique and key contribution and the importance of it to the overall value or competitiveness of the enterprise, perhaps compensatory remuneration is justified.
In some circumstances, some of the above approaches amount to the same thing, and often the final number does include consideration of multiple of the above approaches. How many of the above considerations does your enterprise use when determining compensation for current and potential contributors? Are there others not included on this list?
In 1994, Standish group dropped a bombshell on the rapidly growing IT industry by publishing the gob-smacking rate of only 16% successful IT projects in the prior 12 months. They suggested that the reason was a lack of project management discipline for IT projects; akin to the kinds of project management discipline that engineers use to build skyscrapers, cruise liners and bridges. Standish’s conclusion: “IT needs its own project management methodology and the skills and tools to deploy it!”
The impact was dramatic. A number of efforts began across the world to develop a suite of standards and methodologies that could help project managers and their stakeholders improve the chance of IT project success. Some (e.g. PRINCE2) were based on embryonic existing methodologies, whilst others were genuine efforts to develop new methodologies from the ground up.
Over the first few years of the Standish Group results, the new project methodologies were still maturing and adoption was slow. Most practitioners did not hear of PMBOK or Prince2 until some 4 or 5 years later, so widespread adoption of these methodologies (and therefore their potential impact) lags their development. However, that initial report was 25 years ago now and we have since developed globally-adopted and widely practiced standards in (i) project management, (ii) program and portfolio management, (iii) business analysis, (iv) change management and (v) benefits realisation. Indeed an entirely new multi-billion dollar education, training and certification industry has arisen to service this apparently pressing skills gap.
So, if Standish was right and it was methodology and project discipline that was the problem, then we should by now see a significant improvement in IT project success hit rates. So lets take a look:
Analysis: The first few Standish Reports had changing definitions and sampling frames which explains the initial fluctuations particularly between the “challenged” and “failed” categories. However, eventually the rate of “failed” projects has settled to around 20%, “challenged” to around 45% and “succeeded” to around 25%. What looked like improvements up to 2012 have since turned around and have generally headed in the wrong direction for the last few years. Some have suggested the apparent improvements up to 2012 were actually due to the increased proportion of smaller projects in the survey (particularly post-GFC). Smaller projects have always shown a higher rate of success throughout the entire period. Indeed comparing 1996 vs 2015 shows an increase of just 2% of projects successfully completed (27% to 29%).
A 2% improvement is scant justification for the enormous investment in training, standardisation, certification, discipline and management effort. The project management education industry is now a multi-billion dollar industry globally, but as far as we can tell from the above analysis, it is not contributing to improved IT project success rates. If so, then how is all of this investment and effort contributing to the economy beyond John Meynard Keynes’s hole diggers.
Us humans do lot of things because they sound right. If it has a good story (see Beware of the “just-so” Use Case Stories) that’s good enough for entire industries and academic disciplines to continue working away for years and even decades before its noticed that it is all based on nothing tangible. I’m afraid that the evidence is in:
Project Management discipline has not improved the success rate of Corporate IT projects!!
A common reaction is to just do things harder. The story that project discipline improves projects must be true. So the lack of empirical results is simply evidence of a lack of effort/discipline/application: If we just hired a more qualified/experienced/talented project manager…if we just documented user requirements more thoroughly!…if we just applied more management effort toward realising the benefits in the business case! “The floggings will continue until morale improves”. No! The problem is that Standish, even though it sounded right at the time, have proven to be wrong and there are other (much more important and prevalent) causes for such widespread IT Project failure rates. So we must look more widely for clues as to why we still have such high project failure rates. I believe some clues can be found here (over-generalisation of success in different domains) and here (the planning fallacy).
Do you agree that project management methodologies have been oversold as a panacea for IT project failure rates?
Are Corporations People?
“Corporations are people, my friend” said Mitt Romney in 2011 during his ultimately unsuccessful presidential campaign against Barack Obama. But we all know that he is not correct. Corporations (or any disembodied entity like companies, trusts, partnerships etc) cannot be embarrassed about an unexplained lump on an inconvenient body part, or feel the need to hide a secret love of Rick Astley tunes from their friend group, or, perhaps more importantly, have a need to suppress public knowledge of racial or cultural origins, a current or prior disability or of a personal religious belief for fear of vilification. Let alone the inability to have their liberty curtailed by spending time behind bars for breaking the law.
What is Privacy Protection For?
Indeed privacy is primarily about these issues. Privacy helps protect minority individuals from persecution by ensuring that they are the only one’s who can reveal their private information… to whom they desire & if and when they so choose . The other purported benefits such as protection from identity theft or reduction in being hassled by telemarketing companies are, in fact, primarily treated via other legislation. Note that the right to ensure that data held about you is accurate (and therefore decisions based on such are well informed) is related to privacy, but actually does not relate to the right to have that data restricted from distribution.
Fair Use vs Privacy
Fair use (not privacy) is the concept that it is a form of con job if you ask for someone’s information for one purpose and then use it for another purpose, which may be harmful to that person. The idea being that if the person had known the other secondary purpose was a potential use and that that secondary use may result in a negative outcome for them, then they must be allowed to have chosen to restrict the provision of the information in the first place. But what if the secondary use is for regulatory compliance checking or criminal investigation. If such information collection is compulsive then the individual could not have chosen to not provide to the second use. So secondary use, in such cases, is simply a more efficient method than compulsively re-asking for the same information.
Privacy as a means to hide criminal activity
Privacy rights do not imbue an individual (nor their agent) the right to restrict access to information based on the argument that it may reveal the individual’s illegal activity and therefore result in a negative outcome for them. This is called obstruction of justice. So, if a regulator or police investigator is attempting to detect, prevent or discourage illegal activity, individuals do not have the right to prevent data about them being used for this purpose. This is doubly so for corporations, partnerships, companies, and trusts etc. Firstly, privacy does not apply to these disembodied entities as explained above and secondly these organisations are simply legal entities which possess publicly recognised and accepted associations between multiple individuals. These associations (e.g. a corporation) and the entity’s rights and privileges are bestowed by community licence. Therefore their privacy is anathema to the community’s ability to oversee whether the community licence should continue to be granted.
Privacy should not be granted to corporations (only to the individuals inside them)!
This is particularly important for regulators; whether they be regulators of markets, industries, elections or parts of government. If they are conducting regulatory compliance assessment activity they are looking for non-compliance with regulation. Mostly this is regarding the actors within a market or industry that are corporations or are, at most, individuals as it pertains to their activity in a market. None of this should be considered private information. So regulators, government agencies and 3rd party data holders should be able to share data about corporate activity without having to consider the corporation’s “privacy”. Even sole trader’s data will only be of interest in so far as it relates to the sole trader’s activity in the market. Such activity needs to be transparent to regulators and so, it too, should not be subject to privacy.
Similarly corporations cannot claim commercial-in-confidence as regulators are not competing with them. Such data, of course, should not be shared by regulators with competitors nor shared publicly; but it can be safely used for regulatory compliance analytics work.
If the data required to assess regulatory compliance is inextricably inter-twined with an individual’s preferences for Rick Astley tunes, then we may have a problem.
So does your organisation separate the information about individuals from that of disembodied entities (e.g. corporations) and treat these cohorts differently with regard to privacy legislation or is at all treated in the same way?
This article is the second in a Regulatory Analytics series. The first, titled Auto-Compliance is about the concept of Presumed Omniscience and the power this confers to make markets and other community interactions fairer and more productive (see https://www.linkedin.com/embeds/publishingEmbed.html?articleId=7326197899618471194 )
The world of big data has certainly revolutionized the areas of marketing, promotion and customer fulfillment (see Google and Amazon respectively) and has also had significant impact in the areas of finance and insurance. Government and regulators, however, really haven’t been capturing the benefits of big data a great deal to date. All that is about to change.
The new concept of Auto-Compliance is the regulatory nirvana of all participants in a market complying with all regulations because its the simplest, most efficient, lowest risk and most profitable thing to do. Its a state where all participants in a market evaluate the risk of non-compliance as too high to make pursuit of a non-compliant approach worthwhile. Sounds great but how can this be achieved?
To illustrate, lets imagine you are a manufacturer who can (i) choose to dispose of industrial waste compliantly at significant cost or (ii) choose instead to dispose of the waste non-compliantly at next to no cost. The temptation is there to decrease costs by disposing waste non-compliantly. What’s worse is that if your competitors are all disposing of their waste non-compliantly, they can cut their costs & their prices and then put you out of business. You may be almost forced to violate the waste disposal regulations. The only (ok, major) disincentive is the risk of getting caught… known as compliance pressure. But if there’s little risk of getting caught, then not only will you not get caught, but neither will your competitors!!
Many regulators only receive data and information provided to them by the participants in the market themselves. This means that regulators only know about things in detail based on data they’ve been provided (and what they find out about the individual entities they conduct expensive investigations upon). Most importantly, participants themselves know what data they have given a regulator, and also what they have not given. This puts participants in an ideal position of knowing what regulations they can safely violate and what regulations they cannot safely violate. Indeed, they also know that their competitors know this information as well. If the Regulator has no further sources of detailed information and/or any ability to undertake sophisticated analytics, then there is little compliance pressure. Participants are almost forced to violate the un-monitored regulations, just to stay competitive.
But Regulators can’t simply keep asking for more participant data. Onerous regulations such as these increase the regulatory impact on the industry, and eventually the cost of compliance overcomes the ability to turn a profit. Another impact is the artificial barrier to market entry such onerous regulation creates for startups. Regulators need to exert compliance pressure on all, without penalizing the compliant and the small with onerous regulatory burdens.
The response: Big Data & Analytics
Some regulators are now beginning to build sophisticated analytics capabilities and looking for opportunities to get data from other sources (e.g. other regulators, other government agencies or even 3rd party data providers). These Regulators can begin to use sophisticated big data and other analytical techniques to predict and detect non-compliance far more accurately and efficiently. A few key busts of non-compliant behavior with their shiny new Regulatory Analytics capability and suddenly market participants can no longer be sure what their regulator knows and what it doesn’t know.
Indeed if the regulator vaguely announces that the Analytics capability is “continually improving” and that new sources of data are being continually attained and deployed (without being too specific), participants can’t even be sure they can continue to violate regulations they previously violated safely. Participants may have gotten away with breaking a rule last week, but the Regulator’s analytics capability is improving and might get them if the participant tries it again next week.
Interestingly, even the regulations that are not being actively monitoring are enforced, because the participants don’t know which activities are being monitored or predicted. It becomes rational to simply just comply with the entire regulatory regime. And, most importantly, all competitors are in the same boat…there’s no strong competitive pressure to cut corners to gain competitive advantage. Congratulations, the Big Data & Analytics Fortified Regulator has now achieved “Auto-Compliance“.
Generalized cost effective compliance of all participants with the entire portfolio of regulations is the dream of regulators the world over. Overseeing a level-playing field where competitive advantage has been achieved only through innovation and industriousness and not through covert regulatory avoidance is possible with Auto-Compliance. Indeed many complex and onerous regulations are in place purely to encourage compliance with other more fundamental regulation. Auto-Compliance allows the regulatory landscape to be simplified back to core compliance goals, saving significant overhead for both market participants and the regulators themselves.
If you’re a regulator and have started the journey toward Auto-Compliance (I know some of my clients have begun the journey) make a comment below. If you want to join this latest wave in regulation, let me know.
Business Cases are one of the most common business documents used today and yet their use is commonly misunderstood. Often business cases are seen as simply “step 4” on the path to a completed a project. Worst of all they are often written by someone who is incentivised to have the project approved. Indeed, in some cases, the quality of the business case is even assessed based on whether the project was approved.
This kind of “need-to-get-it-approved” bias leads to an underestimation of costs and risks and an overestimate of benefits. But often decision making bodies such as Boards and Steering Committees simply don’t have the time and/or expertise to delve into the detail sufficiently to detect this bias. They can ask some pointed questions, but essentially the costs, benefits and risk estimates in the business case are what the decision makers must use to make their decision. No wonder Standish Group keeps finding so many IT projects failing to achieve project benefits on-time and on-budget (over 80% failure rates for enterprise wide system implementations in a number of their annual surveys).
So what can we do to balance the ledger and ensure that we aren’t receiving an overly rose-coloured assessment of a potential project at the business case stage? Enter the Anti-Business Case. This is a business case written by the “opposition”, who are independently trying to prove to the committee that the project should not proceed. In many cases the cost of developing a business case is only 2-5% of the total cost of a project. Money well spent, if the benefit is a clear-eyed view of the real costs, benefits and risks before investing large in a new endeavour.
The concept is borrowed from the justice area where a plaintiff and defendant provide opposing views to a judge before the judge balances the evidence and argument and makes a decision. Similarly the parliamentary system which tends to have an opposition which provides an alternate viewpoint to the voters. These institutions have stood the test of time and have proven their worth against the risks of groupthink and biased provision of information.
However, in practice, developing an anti-business case does require some practicalities. There does need to be a coordinator that ensures the options being evaluated by both the business case and the anti-business case are sufficiently simlar to be of value. It is no point if the anti-business case is arguing against a “strawman”; something the business case is not recommending. It is also important that any factual information is available to both sides (equivalent to legal “discovery”). However, it is important the two efforts develop their cost, risks and benefit estimations independently.
At the end of the business case process we should have a number of outcomes beyond a simple “Approve” decision:
- The Sponsor asserts that they have researched the proposed project in sufficient detail using reliable approaches to accurately estimate/forecast the likely costs, risks, resource requirements and interdependencies. The Approvers accept the Sponsor’s assertion when approving the business case.
- The Sponsor commits to deliver the benefits identified in the business case document and has determined that it is possible to do so within the documented resource, timing and cost allocations and that any risks can be mitigated to an acceptable level as outlined in the business case. The Sponsor commits to do so in the manner described in the business case, which the Sponsor asserts is the most feasible manner to achieve the benefits within the resource constraints.
- By approving the business case, the Approvers (e.g. the Board or Steering Committee) accept the Sponsor’s assessment that the benefits are of value to the organisation and that they can be delivered within the resource, timing and cost constraints at an acceptable level of risk. The Approvers also agree that the manner of achieving the benefits outlined by the Sponsor in the business case is the most feasible approach.
- The Sponsor asserts and the Approvers agree that the expected business benefits are sufficiently high and delivered in time to justify the expenditure of the resources required to achieve them. The Approvers obtain the right to have the Sponsor or some 3rd party demonstrate that the benefits documented in the business case have been realised in the timeframes required at the end of the project.
- The Sponsor has asked for delegation of the resources, budgets and permissions required to undertake the project (or at least its next stage) and the Approvers have delegated those resources to the sponsor
- The Approvers commit to not approve alternate uses of the delegated project resources in the future and will not approve future projects that presume that this project will not deliver the benefits (unless this newly approved project is altered accordingly)
- The Sponsor commits to use the delegated resources in the manner specified and for the achievement of the documented business benefits and not for other reasons or in other ways.
- The Approvers agree that any portfolio interdependencies of this newly approved project have been identified, resourced appropriately and that the interdependencies and their timing are acceptable to the organisation and the project/program portfolio. From approval onward, the Approvers agree to treat this newly approved project as part of the relevant program and portfolio.
- If there are any departures to organisational norms required by the project (e.g. relaxation of architecture standards, changes to policy), then the Sponsor commits to limit the departures to those documented. The Approvers indicate acceptance of the departures when approving the business case.
- The Sponsor commits to communicate the expected activities, resource impacts, timings, deliverables, etc of the project over the coming horizon to all stakeholders (at least to high level). The detailed project plan will provide these to a greater detail.
- If the Approvers accept the timing proposed by the Sponsor, then they are affirming that they believe that the proposed project has sufficient priority to deploy the resources required in the timeframes outlined. Approvers may approve a business case but ask that timings be changed to fit within a portfolio prioritisation. If this is so, then the Sponsor must affirm that this change has no material impact to the achievability of the benefits.
- If the Sponsor has come to the conclusion that the project is not advisable as a result of undertaking the analysis required to develop a business case, then the business case should still be developed to demonstrate to stakeholder the reasons why the project does not “stack up”. The Approvers are then affirming acceptance of the recommendation and agreement with the analysis and estimates in the business case. Obviously an anti-business case is not required in this scenario.
It is important that all stakeholders know what commitments they are making when submitting and/or approving a business case. It is not simply a “Go/No Go” decision. Given this range of commitments made by both the Sponsor and the Approvers it becomes clear that a reliable set of unbiased assessments of likely costs, benefits, risks, interdependencies etc are required to ensure that stakeholders can make those commitments in an informed manner. An Anti-Business Case may be appropriate in some circumstances to help stakeholders make approval decisions with confidence. Can you think of a time when your organisation should have appointed someone to undertake an anti-Business Case?