Explaining Why: The Theory of Change in your Business Case
Rob Turner
Developing a robust Theory of Change was an important element of creating strong Town Investment Plans (TIP). Done well, the Theory of Change provided clarity and logic to the TIP; it underpinned the selection of projects; and it supported the communication of the vision and plans to both MHCLG and wider stakeholders. For many, the Theory of Change was represented graphically in the TIP in the form of a logic model.
These logic models provided a simplified view of how the Towns Fund – and the projects it would support – aimed to deliver change locally. Its effectiveness was in its simplicity. It provided an easy to understand, plan on a page. It covered the key aspects of the intervention and mapped out – at a very high level – how particular activities would deliver different outputs and outcomes.
However, as we move from plans to action, from strategy to delivery, there is a need for the business case to unpack the theory behind the change proposed in more detail. It needs to explain why this investment will make a difference and how it will be delivered. It is a level of detail that needs to be drawn out through each of the five cases:
Strategic case – needs to draw out the context for the project: What are the objectives? What are the local conditions and challenges that the project will help address? What is the case for change?
Economic case – needs to draw out the outputs and outcomes: What will this project deliver in the short- medium- and longer-term? Who will benefit from the project? What will happen if no action is taken? How will shorter-term outputs help to deliver longer-term impacts?
Commercial case – needs to draw out the viability of the project: What needs to be procured to ensure that the benefits can be delivered and the challenges addressed? What time will be required from key people to ensure it is effectively delivered? What other resources are required?
Financial case – needs to draw out the inputs required: What funding is required and from whom? Is the project proposed affordable?
Management case – needs to draw out how the project will be delivered, its implementation: Over what timescale will activities take place and in what order? What are the key risks and how will these be managed? What other dependencies are there and who else is involved in delivery?
As you start to develop your business cases, it would be very easy to leave the Theory of Change behind – to see it as playing a specific role within the TIP but not the business case.
Doing that would, however, be short sighted. It would result in a less coherent and compelling business case.
Rather, continually referring to the Theory of Change in the development of your business cases will ensure that your business cases contains a logical chain of cause and effect. It will help make the case for how your projects will deliver change within your Towns. It will explain why a particular project is needed. This keeps your business case rooted in the wider rationale for driving change in your place.
If you would like guidance on how to integrate your Theory of Change into your business cases, your Town Coordinator can connect you with one of our experts.