Is There A Buyer's 'Five Tests'?

I note that the issue of Britain’s embrace of the Euro briefly reared it’s head for the chattering classes just now.  I’ve always felt this a non-issue, a political dead-end, because whatever your stance, it is impossible to imagine a time when the required referendum would ever vote in favour.  Still, it did remind me of the famous Five Tests.  The precise questions are not as important as the fact that they exist.

It strikes me that anybody faced with a big decision could benefit from such a stated decision criteria framework.  In this case, the Five Tests seem principly devised to re-assure Europe that Sterling might actually make way for it one day.  But imagine what anyone wishing to buy anything at the moment must have to go through.   Especially if that purchase requires any degree of change to follow it.  The pressure to kick the plan into the long grass must be huge.  “Have you heard of the credit crunch?”  “Did you know we’re in recession?”  You can hear the knock-backs already.

Yet adopting an approach like the Five Tests could help tip the balance of a decision your way.  Especially if you’ve been involved in drafting the criteria.

The Euro Five Tests as set by then Prime Minister Tony Blair around a decade ago now remain roughly:

  1. have the UK and Eurozone economies converged?
  2. is there sufficient flexibility built in to membership to allow unforseen problems to be tackled?
  3. would long-term investment in Britain be improved?
  4. can London keep its place as the world financial centre?
  5. will being in the Euro provide more growth and jobs than being outside it?

The then Opposition Leader William Hague sought to expose their uselessness as a true indicator of intent shortly after their inception with his own interpretation:

  1. Does Peter want it?
  2. Will Gordon let me?
  3. Will the French like it?
  4. Will Robin notice?
  5. Can I get away with it?

You don’t need to know to whom any of those questions refer to appreciate what I’m getting at.  Let me explain further…

In the mid-90s I was in the midst of a sales training bootcamp in Amsterdam where I received instruction in constructing a compelling business case.  One of the managers putting us through our paces was trying to run rings aorund me by slamming the ‘there’s no budget’ door in my face.  My counter won applause when I included the line something like “what return would a piece of non-budgeted piece of expenditure need to show in order to be considered?”  The manager was momentarily put off his stride.  He paused to comment “good question”, pleasingly with everyone agreeing that I’d opened up a crucial flank.  The conversation opened up in my favour.

Although this was clearly an artificial environment and not the real world, it does suggest that even in the toughest of times, if you can frame a buying decision around needs that you control, glory awaits.

So as we’re all put through the mangle over the next (several?) Quarters, documenting what it’ll take to trigger any investment should be a winner.  Here’s my first pass for the Recession Investment Five Tests:

  1. will the purchase categorically leave us better off?
  2. are there real, as opposed to paper, cost-savings or revenue gains?
  3. is payback aligned to outlay?
  4. does the change negatively impact any other endeavour?
  5. would it be easy to change course quickly and limit damage if adoption causes problems?

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