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5 Areas and 20 Questions for Improving Organisational Health

Guest post by: Douglas Long

Article Overview: Just like individuals, there are very good reasons why every business should do regular health checks. While most medium to large businesses are aware of this and, in part, use frequent CEO briefings to do this, what happens in small to medium sized businesses (SMEs) can be a little like what happens with too many people – we know we should do it but never get around to it until a situation arises that cannot be ignored.

5 Areas and 20 Questions for Improving Organisational Health

From a personal point of view, most of us know our vital signs need monitoring from time to time. Accordingly we will check our blood pressure, heart rate, and check for breathing issues at least on an ad hoc basis. The vital signs of an organisation need checking, too. You can do that very easily by looking at the following data which, in virtually every organisation (no matter how small) is either immediately or fairly readily available:

· What is your bank balance right now – today?

· What are your receivables – the money owing to you?

· How much of that will you receive this week? This month?

· How much of it has been due for more than 30 days?

· How much money do you need to pay out this week? This month?

· How much of it has been due for more than 30 days?

· What is the value of your current “work in progress”?

· When will you be able to charge for this?

· When do you expect payment to be received?

· What extra payments will you be liable for before this work is completed?

The answers to these questions give a “quick and dirty” indication of the health of the organisation because they give an indication of current cash flow issues – and positive cash flow is the life blood of a healthy organisation. Based on these questions you can decide whether intensive care (talk to your Board and bankers/financial advisors “NOW” because your situation is seriously bad) is required or whether some other action is more appropriate.

No matter how small your business or whether or not your organisation is in need of intensive care, there are 5 areas and 20 questions you can use to determine (and improve) organisational health and sustainability:

1. Knowledge.

i. How clear and focused are the vision, values, purpose, and objectives/goals of the organisation (both qualitative and quantitative)? How can you make them focused and precise?

ii. How well are these known and understood throughout the organisation? Why not?

iii. How are these reflected in the Key Results Areas (KRAs) and Key Performance Indicators (KPIs) for every area and individual in the organisation? Why not?

2. Strategy.

iv. In broad terms, how does the organisation intend to make its vision a reality – to attain its objectives/goals?

v. How well are these strategies understood and applied in all areas and by all individuals in the organisation? Why not?

vi. How are these strategies reflected in the everyday tactics used in all aspects of the organisation’s activities? Why not?

3. Non Human Resources.

vii. Does the organisation have the right resources (money, materials, equipment, etc), in the right amount, to operate effectively? What can you do to correct any imbalance?

viii. Do you ensure that the right resources are available at the right time and in the right place for the right people (and are the people properly trained / licensed / equipped to use them safely and correctly)? What can you do to correct this?

4. Structure.

ix. What is the decision making process?

x. What is the lowest level in the organisation where decisions can be made? Why? Why not?

xi. What are the repercussions of making the wrong decisions? For whom? When?

xii. What is the decision making environment within which the Executive Team operates?

5. Human Process.

xiii. What are the labour turnover figures and how do these compare with your targeted turnover rate as set out in your business plan?

xiv. What are you doing about any discrepancy?

xv. What are your recruitment processes and how could these be improved?

xvi. How do you develop and maintain the requisite level of competence at all levels of personnel and how could this be done better?

xvii. What process do you use to monitor customer/client satisfaction and how could this process be improved?

xviii. How do you monitor the external environment that will or could impact on the organisation and what use do you make of this information?

xix. What is your relationship with the various trade unions / professional bodies that are represented in your organisation and how could these be improved?

xx. What process is used to get on-going, real time feedback from personnel on issues and concerns? What do you do with this feedback? Why?

These are the areas that will determine whether or not an organisation is healthy. If your organisation's not the epitome of health, these are the areas that can help you return to organisational health.

Answering these questions will highlight possible “ouch” points that need to be addressed.

And what happens after answering them?

Well, that’s up to you!

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Article Tags: cash flow, fixing a sick organisation, Human Process, organisational capability, organisational health, Organisational knowledge, organisational performance, SME, Strategy



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