investing beyond

We are all familiar with the basic concepts behind a business case: to quantify the value an organisation will receive in exchange for the resource investment. While a somewhat simplistic summary, the basic principle holds that investments of capital, assets or human resource are made when a tangible benefit can be realised. And in the vast majority of cases, that benefit is measured in financial terms. And while this is acknowledged as being an imperfect model for capturing the qualitative or intangible benefits of an initiative, it is the one we typically default too as it is easier to populate and get through approval gates.

While pragmatic I wonder if this general approach is full of risks. Risks that we’ll make the “right” decisions only to get the wrong outcomes; or that we’ll incur unintended consequences; or that we’ll miss unplanned benefits. For example, when we look at taking labour costs out of an organisation we typically focus on the easy justifications. Less people = less cost = improved bottom line result. And while we look at the people impact, consider the loss of IP and impact on staff morale etc… we seldom quanitfy these in a way that changes a business case. Rather, we look at them as things that need to be managed through good HR practices. Within our boardrooms we accept this as sensible business practice and can justify its importance to ongoing business sustainability, returns to our stakeholders and so forth. But to people outside of our organisations these actions often seem foolish. Why is there a disconnect?

Perhaps the perspective we need to consider is in the everyday world of our lives we have an awareness that all things work together. We don’t make decisions in our personal lives that are purely driven by financial metrics. We consider other factors like relationship impacts, health and wellbeing, whether a decision aligns with our longer terms plans, and a variety of other consequences. I sometimes wonder if we should bring some of that thinking back into our organisations. Maybe we need to look beyond the short-term financial returns and consider investing beyond. For our people, our cusotmers and our stakeholders. This approach considers the truism that people’s value cannot be measured by their salary costs, and therefore with every downsizing exercise we potentially act on a poor business case – where the cost to our organisation is far greater than the benefit it receives.

Again I recognise the simplicity of this argument, however sometimes its healthy to step back and look at things with a more basic, common sense, lense and just ask the question: is this the best way to build our future?