Is your business ready to weather the challenges presented by today’s economic environment? Assessing your business and operating models can help.
As we try to adjust to an environment of constant technological change, where we’re spending a lot more time at home in a “hybrid” model, some businesses are doing exceptionally well (in at least some cases, probably because they conduct a regular business assessment to determine how to take advantage of that change), while others are on the brink of extinction.
In addition, with the advent of a generative AI influence upon all sectors of the economy, businesses are – of necessity – looking to creatively integrate AI into their offerings while simultaneously trying to avoid being wiped out by AI-enforced obsolescence.
Most of today’s shifting macroeconomics – including the geopolitical environment and global economic volatility (sometimes marked by spiking unemployment and inflation rates) are outside our control. These factors can potentially challenge the very foundation on which you built your business.
What you can control, however, is how you prepare your business and how you react to these factors. To do that effectively, businesses should reevaluate their business processes and operating models.
Assessments for Business Transformation
A business assessment can help your business at any time, especially when preparing for a business transformation or during turbulent times — when your business is likely undergoing a mini-transformation to keep up.
Before diving into how to evaluate your business, you need to understand a few basics.
What Is a Business Model?
A business model is a company’s plan for making a profit. It identifies the products or services the business will sell, the identified target market, and the anticipated expenses.
Every business model has a product or service at its center that focuses on a customer’s needs and wants. Simply put, you can call this your “value proposition” or “customer-focused value streams.” So, before even turning to your business model, you need to ask yourself some basic questions related to your value proposition and targeted customer segments.
This step means answering the “what” of the business’s existence – how is your business structured, who are its key stakeholders, what are its sources of income?
What Is an Operating Model?
Operating models describe how business structures can produce customer value streams and targeted business outcomes for the organization while serving as a critical foundation for future improvements.
The operating model determines how a business can deliver upon the value described by your business strategy by using people, process, metrics, and technology. The representation below shows different components that constitute the company’s operating model. This means it turns the “what” into the “how.”
Reevaluate with a Business Assessment
I recommend starting with a relevant business value assessment or business process assessment exercise, or both. While these can help you develop an implementable roadmap across people, process, metrics, and technology, they will also:
- Gather voice-of-customer data.
- Decipher key pain points.
- Develop a strategy to streamline business processes.
- Capture internal and external value streams.
- Identify value targets.
- Drive some quick wins.
If the recent pandemic taught us anything, it’s that every business must consider ways to optimize costs and operate more efficiently to prepare more effectively for unforeseen factors. This type of proactive planning can help you become more resilient as an organization and help you establish a competitive advantage.
A detailed business assessment should also help provide your business with a succinct and clear representation of the current capabilities of your business across key business functions, including:
- Governance, direction and risk.
- Strategy, planning and succession.
- Culture, leadership and management.
- Marketing and sales.
- Business development and customer service.
- Organization design and people management.
- Operational management and productivity.
- Business systems and information technology.
- Legal compliance.
- Measurement, monitoring and reporting.
- Financial management and performance.
To get started on your business assessment and transformation, conduct a self-assessment geared toward today’s post-pandemic climate. Here are 11 critical questions you can reflect on now:
- For most companies, a hybrid model is now standard for their employees. How has this model impacted your people, processes and technologies?
- What are your biggest pain points for your business considering today’s reality?
- How can your business become more resilient when uncertainty exists in the market and workplace?
- Have you done a SWOT (Strength, Weakness, Opportunity, and Threats) analysis of different business units in the new norm?
- Do you have visibility into the health of your processes, activities and workforce (such as efficiency, SLAs, utilization, and more?)?
- With the advent of generative AI and increased reliance on AI technologies, are there more opportunities to automate your business process with robotic process automation or business process management to make remote work activities as productive and convenient as possible?
- How do you set up your company and teams to become more competitive or “wow” your customers in this evolving market?
- How do your employees describe working at your company?
g 9. How do your customers describe doing business with your company?
- How can you prepare to perform company activities virtually, as needed?
- Do you have enterprise processes, applications and infrastructure to support working remotely?
Among other things, a well-targeted, proper business assessment can help you find the root cause of a serious problem – whether it’s flagging customer satisfaction, worrisome costs, or high employee turnover rates – rather than a surface fix to a single incident. From there, you can set departmental objectives to address the root cause and establish actionable goals to achieve that objective.
One caveat, though. Comprehensive business assessments are great for isolating problems, but you can make the most of your business assessment findings if you review the results in their entirety. Look beyond what you need to improve and pay attention to ensure all aspects of the business function effectively. Taking this kind of holistic view of the assessment will inform your business-change decision making.
Make a Business Assessment Part of Your Operations
As the first step in any business transformation, it’s important to recognize that assessments are ongoing and, hence, subject to change. While I hope you did a business assessment to help your company through the pandemic crisis, you should continue performing assessments to meet the present moment and, if possible, anticipate future realities.
Ask yourself this: “Do I want to be better prepared for the next macroeconomic challenge?” If the answer is yes, then a business assessment should be part of your business operations.