Q:  Continued: In my previous blog I began answering a response to a particular question regarding why it is so difficult for business managers to agree on what work is most important for them and their employees to spend their time working on. Since I have received so many similar questions, I have decided to spend several columns discussing this particular issue.

A. The focus a past column was discussing the vital role that assessments can play in improvement efforts by more objectively identifying potential areas for improvement. In this column I would like to present the primary aspects of a business that can be fruitfully evaluated through an assessment process. In subsequent columns I will focus on discussing specific assessments that can be used to evaluate some of these business aspects.

Although any business is a whole entity with all aspects being interrelated and functioning together, it can be helpful to categorize some fundamental aspects for the purpose of assessing and evaluating the business.

The following are just three ways one can categorize business aspects:

•The Human Aspect

•The Organizational Aspect

•The Business Aspect

The Human Aspect

No matter how much technology a business may employ, or how well organized or well financed a business is, it’s success ultimately comes down to human relationships and competencies. Given this obvious fact, it is amazing how little many businesses, especially small businesses, invest in enhancing the human aspect. After all, don’t businesses expect to maintain and upgrade other assets? Shouldn’t investing in maintaining and upgrading human assets be the most vital of all investments? Not only is a business’s people its most important asset (an often expressed management cliché), people are the one asset that determines how effectively and profitably all other assets are employed!

Interestingly, we at Aspen Business Group find that virtually all the problems we hear about from business owners and managers involve human issues first and foremost.

For these reasons, we feel that employing professional assessments to evaluate the human aspect and guide improvement efforts should be the first step in any serious improvement initiative.

The human aspect includes various levels:

1. •Individual human beings (individual values and beliefs, motivations, behaviors, feelings, experience and preferences)
   

2. •Interpersonal (interactions between individuals at the individual-to-individual level)
   

3. •Group or team (interaction between smaller groups of people working together toward a common purpose)
   

4. •Organizational (the organizational “climate” and politics, the interactions between groups within an organizational context, sometimes referred to as “organizational culture”)
   

5. •Leadership and people management (the way the people aspects of leadership and management are practiced)
   

In the next column we will discuss specific assessments that address the human aspect of a business.

The Organizational Aspect

A business’s organizational aspect is the structural framework, including its dynamics, in which people work and relate, and upon which the business’s revenue generating mechanism operates. Costs related to organizational factors directly affect profitability.

Organizational factors either support and enhance, or inhibit human and business effectiveness. Unfortunately, managers and employees too often find that they must “work around” organizational factors rather than being supported by them. Organizational assessments can be a great help in identifying how organizational factors are helping or hindering the business.

Organizational factors include:

•Policies and guidelines

•The structure of the organization (how it is organized)

•Administrative processes

•Administrative management

•Financial management and resource allocation practices

In future articles we will discuss some specific types of assessments for evaluating the status of organizational factors.

The Business Aspect

Although all aspects of a business contribute to revenue, profit and success; what we are representing by this category are the core factors that contribute directly to revenue generation, the revenue generating “engine.”

Obviously, the effective functioning of the business aspect itself is critical to business success. However, as you can see the effectiveness of the business aspect rides on top of the effectiveness of both the human and organizational aspects. Too often business owners and managers try to improve their business by pushing the business aspect harder without realizing the leverage they would get by first concentrating on the human and organizational aspects. In fact, pushing harder on the business aspect without dealing with human and organizational factors can actually make things worse.

Business areas include:

•The external business environment

•The primary business mission, purpose, and values

•The business strategy

•Relationships and plans with key stakeholders

•Operational business planning

•Evaluation of results

•Business leadership and management

There are many ways that professional assessments can both evaluate and improve the business aspect.  We will also be discussing this topic of the business aspect in future columns.