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Five Steps to Building Your Business Case for Sustainability

Five Steps to Building a Business Case for Sustainability - Penn State University Smeal College of Business

Happy International Business Case Week! (I made that up...) As you will recall, I promised last week that I would detail a process for building a business case for sustainability. If you missed last week's post you can catch up quick here: What do we mean by a "business case" for sustainability?

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At Smeal College of Business, as a business school, we see the business case as our main contribution to sustainability. In fact, since 2012, we have had a goal that "every student would graduate able to make the business case for sustainability." We are now building learning, behavior and outcome metrics around that aspirational goal (more on that here).

Three important points to review:

  • the business case definition offered in the last post was "presenting of evidence accurately representing a set of circumstances developed for a particular audience through an investigative process in support of a profit-making commercial enterprise"

  • The goal of a business case should be to enable your company and leadership to make an informed investment decision

  • A "business case" is less like a hammer and more like a Swiss army knife. There is no single nail to hit with your business case hammer. It's a Swiss army knife (or like my favorite Leatherman tool) and you have to know what parts to use in what circumstance and with what audience

And we reviewed 7 elements of a business plan from strategy alignment to return on investment.

So how do you create a business case? And what about a business case for sustainability?

There can be some misunderstanding about the "business case." Many people think it's just an ROI/IRR calculation or just about short term profits. Although financial returns and profit margin are cornerstones, there are many other components for the full construction of the case. I will show you how to prepare a business case in the five steps offered by Harvard Business Review Guide to Building Your Business Case by Raymond Sheen:

  1. Prepare

  2. Know your audience

  3. Construct the Case

  4. Crunch the Numbers

  5. Pitching the Case

Let's start today with a short review of Step 1: Prepare.

Step 1: Prepare

Long before you start crunching the numbers and putting your pitch together, you need to remember the essence of a business case: you are telling a compelling story about meeting a business need.

You therefore need to start by answering two questions:

  • What is a compelling story in my particular company/organization?

  • How can I be sure I really understand the business need?

A compelling story: find out how to say “business case” in the local language

Each company or organization will have a different processes and priorities for how they make resource allocation decisions. There is no single business case doctrine which is the same across all human enterprises. It varies not only by company but by industry and by country.

I remember when I served in the Peace Corps, I needed to learn two languages: Spanish and Guarani. Spanish was the language of commerce and of the city. Guarani was the language of the rural people and had deep cultural roots. Over time I learned: to speak to the head, use Spanish; to speak to the heart, use Guarani. Say something in the right language and you won almost instant credibility.

Similarly, you need to find out how to say "business case" in the local "language" of your company.

  • Templates: Large companies usually have templates and a formal process for new project proposals.

  • Timing: They might review proposals and business cases at specific times during the year or during annual budgeting processes. They might review individual cases or look at a portfolio of similar cases. Some companies have processes (formal or informal) to review cases "off cycle", that is, in between budgeting periods.

  • Truth: Most organizations have formal processes (the logical, rational way people say things are done) and informal processes (the irrational, political way decisions are actually made). See Dan Ariely's Predictably Irrational. The truth is often a mix.

Bottom line: Find out how and when decisions about proposals and business cases are really made.

In some cases, your company or organization might not have a formal process. Or they might have a sub-standard process. This might be an opportunity for you to set a new standard and help not only improve decision-making around the business need you have identified, but improve the business case process. That's a win-win.

After this first stage of sleuthing and discovery, you should know how the story must be told, to whom and when.

A business need: how to know a problem is really a problem

The secret sauce of a good business case is not really a secret. It's three ingredients:

  • business need/problem/opportunity

  • alternatives

  • recommendation

You clearly identify the business need, work with a cross-functional team to generate alternatives, and make a well-reasoned, evidence-based recommendation. It's simple but not easy.

At the core of a really good case is a really good problem, but good problems are hard to find. As you prepare and put thoughts together about your business case, be sure the problem you have identified is really a problem. I recommend doing this in three steps:

  • sit with a blank pad of paper and write the problem at the top. First, make a list of all the root causes of the problem. Then write all the reasons the problem is a problem on one side of the page and the reasons it might not be a problem on the other. This is to get your own thinking straight.

  • speak with 3 - 5 subject matter experts who will speak with candor and provide feedback on your list. Get some initial data on the problem and what it is costing the company and/or its customers.

  • check alignment with the business' overall strategy, since if the problem doesn't strongly connect with strategy, it isn't really a pressing problem and just has to get in line with all the other urgencies


Step 1: Prepare should leave you feeling confident that you know how to say "business case" in the local language. You know the timing you are looking at at who will ultimately be making the decision. The next step "Know Your Audience" will get into more depth on this person and or group and her/his/their interests and priorities.

You have also done an initial validation of the problem itself. In short, you feel more confident that the problem is actually a problem. Or you have discovered--through root cause analysis--a deeper more systemic problem to focus on.

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Take this checklist with you....

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