Free The Mobile MBA: 112 Skills to Take You Further, Faster (Richard Stout's Library) by Jo Owen

group early. They will jealousy guard their territory but don’t fight them, work with them. The earlier you involve them, the more likely you are to succeed in adapting your proposal to suit their needs. Show you respect them and they are likely to be flattered to be treated as partners, not as obstacles. Make them into your allies, and they will start finding solutions for you, even as they are finding problems for your colleagues.
    If you are in a position to make decisions about the required rate of return, you will need to do what most firms do: use some simple rules of thumb. These rules of thumb come with plenty of health warnings from finance professors. But in the world of management simplicity rules over sophistication. These rules of thumb will be targets that typically come in one of three flavors:
    • ROI (return on investment): the higher the risk, the higher the expected return becomes.
    • NPV (net present value): this is the discounted sum of all the cash flows associated with an investment. The riskier the investment, the higher is the required discount rate.
    • Payback period: this looks at how many months or years it takes before the investment generates enough cash to pay back the initial investment. The higher the risk, the shorter the payback period required.
    The simplest way of doing things is to sort all proposals into three piles: high, medium or low risk. High risk requires high returns, low risk requires lower returns, as follows:
    • High risk: new products, new markets and new ventures.
    • Medium risk: such as investment in new machinery and product extensions.
    • Low risk: such projects may be dominated by cost savings (changing suppliers, cutting staff, changing the product mix).
    This simple approach has the flaws of most approaches: it is open to game playing (what is high or medium risk?); it does not work for all sorts of spending (IT business cases are notoriously hard to connect to business and financialoutcomes); and it only addresses the financial, not the business, case for a project. At the margin, some good projects will be missed and poor projects may slip through. But for the most part, business does not require making fine judgements about whether a project will make 10.1% ROI (accept it) or 9.95% (reject it).
    To make a sensible investment decision, managers need to ask themselves four basic questions:
    • Is the project financially attractive?
    • Are the assumptions behind the proposal sound?
    • Does the project fit with our strategy and direction?
    • How credible are the people behind the proposal?
    Ask these four questions and you are much more likely to make a good decision about a project than if you rely on CAPM.
Negotiating your budget
    Budgets are one of the must-fight and must-win battles of the management year. You have a choice:
    • You can be an alpha manager and accept the challenging targets that your boss has dared you to rise to. That is a guarantee of 12 months of hard grind and frustration, with possibly no bonus at the end of the year as you struggle to hit an impossible target.
    • Alternatively, you play hard ball and negotiate a sane budget that enables you to have a sane working year. You can then beat the modest budget and enjoy a bonus that your alpha colleagues will miss. Your choice.
    Here is how to play budget hard ball.
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    How to play budget hard ball
    • Manage this year’s performance . If you overperform this year, you simply set a higher baseline for next year. Being a good manager, you should aim to beat the budget, but not too much. If you have slack this year, then delay recognition of revenues and bring forward recognition of costs where you can. This gives you the added bonus of a windfall start to next year: lower costs and quick sales against a modest target.
    • Set expectations low . Find all the reasons why next year will be far tougher than this year: the market will be harder and the workload will be greater