Finance for non-financial managers in the canton of Zurich: does a project remain profitable if its launch is delayed?
In the canton of Zurich, banks, insurers, technology companies and European headquarters of international groups often operate at a fast pace, with international teams using English as their working language. For SHR’s “Finance for non-financial managers” programme, this raises a precise management question: does the projected profitability withstand a delayed launch?
What the literature establishes
Daniel Kahneman and Dan Lovallo (1993, Management Science) analyse how bold forecasts can coexist with a cautious attitude towards risk. Their framework distinguishes an inside view, focused on the project’s own scenario, from an outside view informed by outcomes in comparable situations. An internally consistent financial calculation therefore does not guarantee that its underlying schedule is realistic.
The mechanism: forecasting from the intended scenario
Roger Buehler, Dale Griffin and Michael Ross (1994, Journal of Personality and Social Psychology) show a tendency, in the tasks studied, to underestimate completion times and favour the anticipated scenario over past experience. This mechanism deserves attention in financial appraisal: a late launch can postpone expected cash receipts while extending certain expenditures. That financial consequence follows from reasoning about project cash flows, rather than being an outcome directly measured in this study.
The premature conclusion
One might conclude that every schedule simply needs a safety margin. A uniform allowance, however, cannot replace an examination of dependencies: a delay may defer revenues but also certain payments, and its effects depend on contractual terms. The useful question is which dates actually change cash flows and net present value, meaning the present value of cash inflows less that of cash outflows. (our executive and employee training programmes)
The limits of the evidence and of standard business cases
These studies measure neither delays in Zurich companies nor the profitability of their investments. The first offers a conceptual analysis; the second investigates tasks that do not reproduce the full complexity of an international launch subject to regulatory and technical constraints. In an investment proposal, a base case with undocumented assumptions does not allow their robustness to be assessed, however detailed the spreadsheet.
A practical check in Zurich
Consider a hypothetical example: a Zurich team is preparing an international platform rollout for an insurer, using English-language working documents. In an exercise within the “Finance for non-financial managers” programme, the team can compare the base case with a delayed launch informed by documented comparable projects, then ask the finance function to validate the shifted cash flows and discount rate. The verifiable measure is the difference in net present value between the two scenarios, accompanied by a list of changed assumptions and their sources. If no comparable project is available, the delayed scenario should be presented as a sensitivity test, not an evidence-based forecast. To go further: explore the Finance for Non-Financial Managers training in Zurich in the canton of Zurich, or browse our executive and employee training programmes in Switzerland.
In pictures: Finance for Non-Financial Managers in Zurich
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