MODULE 1: MANAGEMENT COMMITMENT

Financial tools that "sell" your recommendation

When recommendations are not acted upon it is usually because management does not have enough useful information to make a judgment and therefore does not act right away. To speed up the process and to improve the approval rate, you must learn to anticipate the questions that management may ask in order to sign off on the requested change. The more pertinent the information in the recommendation, the greater the odds are for approval.

What are the key elements to improve your odds?

Here's an example of a recommendation.

1) Problem: The guard rail in the warehouse has deteriorated to a point that it is unable to support any weight on it.

2) History: We had an incident on 6/13/99 where Joe Blow almost fell down the 10 steps because the guard rail did not support his weight. He fortunately caught himself before falling. We had a second near miss incident on 9/18/99 when Jane Doe tripped going up the stairs and grabbed for the rail which did not support her. Again, fortunately she caught herself before falling.

3) Options to correct problem: We have attempted to tighten and brace the rail but it continues to work itself loose. We took bids to replace the rail and the bids ranged from a high of $3,200 to a low bid of $1,500. We believe the XYZ brand for $2,000 will prove to be the best material for our facility. The disadvantage to the lowest bid of $1,500 was it would not be guaranteed for outside weather conditions.

4) Other Items: We budgeted "x" for off-site training classes and have secured a source for on-line no-cost training through OSHA which could save "X" dollars that could be applied toward part of the cost of the guard rail.

5) Cost/Benefit: ROI. Average cost of a severe injury is $9,700 which is very possible if one of our employees should fall from the second story of the warehouse to the concrete pad below. The estimated indirect cost is $17,500. Total accident cost is estimated to be $27,200. ROI will be approximately 1,360 percent!

6) Payback Period: I estimate that the probability of an accident occurring within the next two years as a result of this hazard is very high. Therefore, the payback period is based on 24 months. Our cost for corrective action is $2,000 and the pay back period would, therefore, be less than 2 months ($1,133/month.) .