How far should I drill down? I find it very helpful to introduce the financial impact of people management issues in our discussions – it really creates much more interest when I “talk money” and not only “talk HR”. However, in some discussions my management audience keeps asking for more data and more detail. For example, when we talk about the financial impact of cancelling and postponing skill development activities, they ask for calculations that take very single employee and what would be the impact of the skill development on their individual role into consideration. I can of course do that, but wouldn’t we get lost in detail then? Actually, all I want to show them is that postponing development activities is not just an administrational nuisance but really has a cost to the company. What do you think?
You already made a very good point in your question – and I recommend that you make this your introductory statement when presenting the financial impact of a people issue: the goal of calculating the financial impact is not to get a result that is precise to the second digit after the comma – it’s about creating awareness for costs and preparing the ground for business decisions. In your example, if managers want to postpone training because the training time effort will (as they believe) cause a project to be delayed – what is the impact of not having these updated skills available in your organisation? Are you talking about €500, €5.000 or €50.000? This is the kind of question you want to answer when putting a price tag on a problem – whether the impact is €49.705 or €50.115 should not make the big difference. (see graph below)
So, to cut the long story short: Before presenting a Business Case, make sure to set the stage and position the financial numbers as based for prioritization and decision making – this should create the right mind set. Hope this helps!
F-Top Coach / Ursula