Health Check

Business Diagnostics. Why?

In this first of a two-part post I will pose the question – How do you know if your organization is fully effective?

Best Practice

It is a fact of life that most businesses seek outside help once a problem or situation has started to impact on results to such an extent that ‘something must be done’.
Today’s businesses are complex and have increasing interdependence between their people, processes, systems and external influences. As that complexity continues to increase and external ‘change’ gathers pace successful businesses regularly take stock of how effective they are at optimizing performance. They do not rely, solely, on financial analysis alone (see my previous post ‘Measure or Manage’) that are, by very nature, ‘lag indicators’ tending to measure consequences of events.

The Need for Diagnostics

Successful businesses have found a way to manage these events with ‘lead diagnostics’. They have done this because they know that the increasing dependence on complex computing and sophisticated telecommunications (especially in client contact and servicing) and the heavy investment and maintenance cost has created an environment within which minor deviations from the expected can rapidly undermine profitability. Waiting for problems to materialize in the balance sheet and THEN addressing them has become a very high-risk approach.

Four Key Elements

High performing businesses have found a way to monitor and robustly manage four key elements

  1. Strategy and direction
  2. People in terms of capability, alignment and commitment
  3. Enablers – processes, systems and structure
  4. Leadership-which links the above three together

They have found that all four elements need to be taken independently and together.

Challenging Questions

The challenge for most businesses is NOT what they want to do or where they want to go. The real challenge is to be clear where you are on the journey and what is the most effective next step. Challenge yourself to ask the following

  • How much does the structure help or hinder performance?
  • Are you doing enough to ensure you have capable people 100% committed to or goals?
  • How do you know if your processes suit your strategy?
  • Is your leadership fit for purpose for today and the future?

More and more, individuals are reaping the benefits of a regular personal health check; they can then focus their efforts on maximising their own fitness regime that maximises their chosen performance. Apart from monitoring financial wellbeing does your organisation have the right fitness regime?

In my next post I will outline a diagnostic tool that can be used to undertake a business healthcheck that does not rely on financial spreadsheets or benchmarking.

Extract from an article originally published in The Journal of Change Management