Is your business ready to weather the challenges presented by today’s macroeconomic environment? Assessing your business and operating models can help.
As we try to keep ourselves afloat while stuck at home, some businesses are doing exceptionally well, while others are at the brink of extinction.
Today’s unprecedented times are bringing to light shifting macroeconomics, including the geopolitical environment, economics, unemployment and inflation rates — most of which are outside of our control. These factors have the potential to 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. With diminished rates of revenue growth and a downturn in the economy, businesses should use this downtime to re-evaluate their business processes and operating models.
Assessments for Business Transformation
Assessments can help your business at any time, but especially in preparation 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 your targeted customer segments. This step means answering the “what” of the business existence.
What Is an Operating Model?
Operating models describe the way business structures can execute on the customer value streams and targeted business outcomes for the organization while serving as a critical foundation to guide 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.”
Re-evaluate With Business Assessments
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
In the context of our current climate, every business will need to consider ways to optimize costs and to be more operationally efficient to better prepare for unforeseen factors. This type of proactive planning can help you become more resilient as an organization and help you establish a competitive advantage over your competition.
A detailed business assessment should also help provide your business with a succinct and clear representation of the current capability 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 climate. Here are 11 critical questions you can reflect on now:
- Has working remote become a “new norm” for you?
- What is causing your business to struggle in today’s reality?
- How can your business become more resilient with uncertainty 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?)?
- Are there additional opportunities to automate your business process with robotic process automation or business process management to optimize remote work activities?
- How do you set up your company and teams to become more competitive or “wow” your customers in this evolving (remote) market?
- How would your employees describe working at your company?
- How would 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?
As the first step in any business transformation, assessments are ongoing. It’s essential to do one now to help your company through the current crisis. But you should continue performing assessments, crisis or not. 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.