29Sep2011

Business Health Check

We normally think of money and head count as the necessary resources to do a business. I am of the opinion that much more resources are needed either to perform a simple task or run a big business. I call these resources as CAPABILITIES (PLEFIMS: People, Leadership, Expertise, Finance, Infrastructure, Management, Speed). Here I am listing these CAPABILITIES to build a base for the concept of organizational health check, that is very simple. Once we assess the AVAILABILITY on a scale of 1 to 5 (Adequate, Satisfactory, Good, Very Good and Excellent) of these CAPABILITIES we can very fast define the most important focus areas for improvement in the organizational health.

 

CAPABILITIES

 

1. People:

People are the most important for any job we do. Under people not only the employees but also customers, vendors and business partners are considered. The main question is how good is the networking and how right are the people we know. In school we used to say that the wave length matched between the thick pals. Though in business this is not always possible, it is imperative that we consider the character when we count our people.

2.Leadership:

We can only achieve outstanding consistent performance if and only if true passion can be ignited in the people that we spoke of under 1. True passion comes only if the purpose is noble and this is what leadership is all about. Creating a vision, mission, values, business ethics, strategy and approach with a learning environment and open culture to a secure future with a noble cause.

3. Expertise:

In today's world just having a noble cause with passionate people can only be used for monetary benefits, provided know-how of the product/service in question as well of the direct processes needed to produce is available. Product/service core competencies, the related IP rights, perceivable USP's are all accessible and known either through available documentation or through the people considered under 1.

4. Finance:

Needless to say money is always needed to perform a task or run a business. Market capitalization, asset base, profitability, cash reserves, outstanding receipts as well as payments need to be thoroughly analyzed. When checking an internal performance the consistency in adhering to defined budgets and the ability to make correct expense forecasts can be used as a capability for assessing the organizational health.

5. Infrastructure:

Buildings, machinery, equipment, hardware, software, etc, would all fall into the infrastructure category. It is mandatory not just to check the availability, but also check the usability and the condition of the infrastructure. It is very common in business to exploit (over use without proper maintenance) the infrastructure at the cost of getting fast results. This common phenomenon not only erodes the infrastructure but also demoralizes the people using this infrastructure.

6. Management:

One time success can be got easily without management, since management in my perception is the art of consistently doing the job in a most optimum and efficient manner. Therefore policies, guidelines, systems, processes and procedures come under management. It is imperative that cascaded (across hierarchy levels) targets are deployed from the business plan, a meaningful MIS along with cascaded reviews/feedback for all key performance indicators/results as well as absolute clarity of roles/responsibilities exist. Both the target deployment (top-down) and reporting (bottom-up) through hierarchy must be having the same unique path.

7. Speed:

Last but not the least important is time as a resource. In order to have the speed in whatever we do, it is essential that a SDCA/PDCA (Standardize/Plan, Do, Check and Act) mindset is evident and constantly a formal learning system exists to reflect and learn from both good and bad experiences. Speed also comes with a clear delegation accompanied by total clarity on who is accountable in organizations for various tasks. The biggest deterrent to speed is the micro-management culture and lack of confidence and trust across hierarchy as well as peers.

 

AVAILABILITY

 

A. Adequate:

A capability can be assessed as adequate in case of anxiety concerning a capability.

B. Satisfactory:

Provided the routine is being done normally then a capability falls into this category.

C. Good:

Being proud of a capability can be a good reason to assess in this category.

D. Very Good:

You are not only proud, but also feel comfortable to talk about relevant capability openly.

E. Excellent:

You would have received recognition for the relevant capability from outsiders.

 

It is quite obvious that these capabilities will lead to key results specific to the organization that meets all the stakeholder needs as well as perception and performance indicators concerning each of the stakeholders. I am listing all the stakeholders once again. Shareholders, Customers, Employees, Business Partners and Society are the 5 main stakeholders for any organization.

 

The CAPABILITIES are also the basis for preparing a SWOT. However, before preparing a SWOT it is essential that the goals or what we want to achieve (our dream) must be the starting point. As far as strengths and weaknesses are concerned the AVAILABILITY assessment will automatically show the areas to further check. For the opportunities and threats the questions must be "Which of the PLEFIMS is available with others that can benefit me?" and "Which of my PLEFIMS may get siphoned out by others?".