Every time I run a seminar on business cases and decision making, or consult on this topic, I tell my audience that so few people can present their case well that it is not at all difficult to stand out. Courtesy of Messrs Wagoner, Mulally and Nardelli, we have a perfect illustration of this point. If three of the most powerful executives in the world cannot do it right, who can?
Let’s learn from the four blunders they made.
Know Your Audience
\Let’s just look at the situation again: the country is in recession, financial markets around the world are devastated. Many have lost significant portions of their retirement funds. You come to the Capitol to plead for financial help, citing dire financial conditions and making a case based on the plight of millions of people, already living in less than prosperous parts of the country. When such arguments are used, it pays to be sincere and humble.
That’s the deal with those corporate jets? This one time, you should have flown coach on a budget airline. It does not matter that traveling by private jet may be more efficacious or secure, although that’s arguable, it still is a sign of irresponsible spending when your audience is the elected representatives of all Americans. How are they going to look at this but with indignation?
Develop a Set of Viable Alternatives
Whenever you’re looking for a solution to a problem, it is extremely important to develop a robust set of viable alternatives. Why? There are several reasons. First, if the alternatives are suboptimal, so will be the decision, or, as Shakespeare put it, “There is small choice in rotten apples.” Second, when you present your case to the decision makers, it is likely that new alternatives will be foisted on you if yours are weak. At that point, you will not be able to address them with diligence and the decision will be, at best, postponed.
Our three heroes had one solution in mind – the $25B bridge loan, which, they admitted, may not be enough, as they squarely blamed the economy and the credit crunch for their misfortunes, factors outside their control.
Another alternative was put before them very promptly - bankruptcy. They offered weak arguments against it, which impressed few in the audience.
What should have been presented are three or four clear investment alternatives with controls in place and enough tangible detail (implementation plan) to assure the lawmakers that this money is not going to be wasted. They should have shown flexibility and demonstrated that the presented alternatives had been carefully thought through and internalized. None of that happened.
Know Your Numbers Cold
As you present your case, you will inevitably have to answer questions on key numbers and assumptions. This is no place for vague answers because they immediately create a deep suspicion that you don’t know what you are talking about. This point is almost trivial, but it is so often ignored that it is impossible to dismiss it.
When asked a concrete question about GM’s financing requirements, Rick Wagoner offered an oration so distinctly devoid of any substance that it led to Congressman Kanjorski’s rather direct restating of the question, which still did not get him even a remotely satisfactory response. It was almost embarrassing to watch, but thanks, Rick, for illustrating my point!
Use Relevant Metrics
How will you know that your project is successful? What metrics will you monitor to ensure that the project is on track? What kind of controls are you planning to establish to ensure stellar performance of the service provider? How will you apportion your investment between the members of your consortium?
Such questions about metrics are almost guaranteed to be asked at the time of decision making. Why? The best laid plans fail not in concept but in implementation. Decision makers simply look for reassurance that the presenter of the case has given serious consideration to the key aspects of implementation, that he or she understands its challenges.
As exemplified by Messrs Wagoner, Mulally and Nardelli, sometimes one does not have to ask too complex a question to become concerned. During the hearing, Congressman Cleaver questioned the magic of the investment amount requested (“$25 billion, why not 26?”) and how it would be divided between the Big Three. The ensuing answers lacked detail, certainty and insight. The three CEOs suggested dividing the $25 billion investment based on their respective market share. What does market share have to do with financing requirements? You are right, absolutely nothing, and it is just marginally better than dividing it based on the CEOs’ height.
The current economy is such a wonderful source of case studies. A couple of weeks ago, I ran a seminar on business cases and decision making for some 130 project management professionals. To illustrate a few salient points, I asked the group to develop recommendations on how to deal with the automotive industry crisis. The participants specifically noted the need for controls and definitive plans before any financing could be provided.
Just five days later, the United States government arrived at the same conclusion.