Business Assessment ROI: 5 Critical Factors

High performing companies conduct some form of regular CheckList(annual or bi-annual) assessment of their business practices. A business assessment measures how well the current or observed business practices of a company compare to a set of industry appropriate best practices.

Larger companies may use an internal multi-discipline team or internal audit group to measure and report performance compared to best practices. Smaller companies find it more effective to use a consulting group or assessment tool as part of a continuous business practice improvement process.

Assessments may focus on broad areas such as board governance, leadership, organization or specific business functions such as sales, finance or human resources.

Return On Investment
Business assessment consultants and assessment tools are available in many forms from a variety of sources; some more reputable than others.  However, the key question for a company new to this concept is, “Can an investment in an assessment of one or more areas of the company produce a reasonable Return On Investment or ROI?”

Many companies would want the ROI to be less than 12 months.  Therefore, any money invested (out of pocket plus opportunity cost such as employee time) would need to be covered by efficiencies from the assessment within at least the first 12 months or first year of assessment completion.  Many companies do not want to invest in any project that cannot recover their cost of investment in the first year.

In other words, how do I make sure I don’t waste time (yours and that of your employees) and money on an assessment process that is not a good fit for my business?

5 Essential Criteria
To get the most out of an assessment process, I recommend that you perform a “due diligence” process in selecting any assessment process.  Any assessment process you consider should score well in addressing the following five criteria.

  • Effectiveness
  • Staff participation
  • Organization Alignment
  • Workshop Review
  • Action Plan
To be of value, the assessment standard must be applicable to your business situation?  Every assessment uses a set of standard criteria for each business function examined.  These are often called “best practices,” which suggests they are officially endorsed by the industry you operate in but in many cases they may be generic and may not directly address how your organization serves or operates your market.
In many cases, the “best practices” are the result of the experience of the assessment developer coupled with best practice information from other sources such as, business publications, books and industry associations; some are more reputable than others.  This set of questions represents the standard that your operation will be evaluated against. You (and several of your key staff) need to validate their fit and effectiveness for your business.
The validation can be as simple as some of your team examining the assessment detail and or taking a portion of the assessment which, if it is available online, can be a low cost investment to “test drive” the assessment.  Results can be produced quickly and a determination made about how the team felt about the experience, whether the results were applicable, and would a full-scale assessment be a significant benefit.
Staff Participation
The method in which the staff is engaged in the process is critical in collecting an honest and valuable perspective.  An effective way to allow feedback, is for those involved to be able to respond with some level of anonymity, so that they are able to respond freely without the pressure from peers and or managers.
An employee is more likely to answer honestly, if they know their answers are not directly associated with them and are, therefore, free from peer (or supervisor) pressure.  The primary objective is to uncover everyone’s perspective – real or imagined.  Dysfunction and misunderstandings cannot be resolved if people are not free to express what they believe is happening in the business.
Experienced consultants can collect assessment responses, but consultant bias cannot be totally excluded from the recording of the responses.  Was everyone presented with the same question?  Did the consultant have to elaborate and in so doing did they add additional information that was not available to all?
Filling out a form either on paper or online captures the responses to the same questions for everyone involved provided they are quantitative. Written answers are hard to score consistently, whereas multiple-choice questions eliminate speculation.
Organizational Alignment
An assessment that can diagnose an alignment problem in an organization can be very valuable. An alignment problem is where one level or part of the organization (i.e. top management) see and implement a best practice one way and where one or more levels down implement it another.  In the following example, we see a situation where the Sales Staff (yellow group) disagree that Sales Management is reasonably involved in dealing with prospects.  The CEO and Sales Management (green group) feel that management has the right amount of involvement.


NA: Not Applicable DK: Don’t Know 1: Strongly Disagree 2: Disagree 3: Somewhat Disagree 4: Somewhat Agree 5: Agree 6: Strongly Agree
Frequency of Response
Sales Management No. NA DK 1 2 3 4 5 6
Our Sales Management has the right amount of prospect facing involvement in our sales efforts. All 8 0% 0% 13% 25% 13% 13% 38% 0%
Sales Staff 4 0% 0% 25% 50% 25% 0% 0%
CEO 1 0% 0% 0% 0% 0% 0% 100%
Management Staff 3 0% 0% 0% 0% 0% 33% 67%



This lack of organization alignment can create all kinds of dysfunction and poor productivity as it relates, in this case, to maximizing sales and management resources for new opportunities.   One of the two groups is most likely right and, whether real or imagined, this type of discord needs to be resolved. Important resources of the business need to be focused on getting revenue and not questioning organizational involvement.
One incident of this misalignment that I observed was the CEO and Sales Management choosing to enter the sales process when the order was assured and were not as available for orders that were at risk and might be lost. They were not working as a team to go after the tough orders and as a result management was not close to the sales and product issues that were affecting sales success.
An assessment that can diagnose a major alignment problem like the one in this example, can provide significant opportunities to improve productivity and produce a significant ROI.
Workshop Review
The assessment process is a living document.  Those involved in the assessment should participate in a review of the assessment results in a workshop environment.  The senior manager or CEO should not lead the workshop process.  An outside moderator or consultant should lead the discussion to encourage open participation by all parties.  A workshop led by a company leader may suppress valuable discussion and participation, as they may be the source of one or more issues affecting best practice adoption and performance.
The workshop is an excellent setting to resolve conflict, clear up confusion and misunderstanding and most importantly educate the group on the purpose and role of a best practice in improving business performance.  This process can be invaluable in securing buy in by all participants in establishing a believable action plan.
Believable Action Plan
It is one thing to discover business practices that need attention but another to put together an action plan that is believable.  The construction of an action plan begins by interpreting the assessment results with the team of employees involved. The team has a high ownership in the results, as each individual contributed to the feedback in the assessment.
This high sense of ownership can, through effective leadership, lead to a high level of participation in identifying what changes need to occur to become more compliant with each poor or below average best practice.  This process can then lead to individual commitment to specific activities and meeting timely schedules to improve a best practice area.
The objective of this process is an action plan where key people have accepted responsibility for high priority activities that will address the most important best practice improvements on a schedule that will produce a high return to the business.

ROI Calculation
The assessment you select should meet or exceed the expectations of the five criteria previously discussed. Selecting the right assessment will lead you to discover high value best practice improvements that will produce an attractive ROI.  Depending upon the size of your business your assessment process may cost (external plus internal cost) from $8,000 to $10,000 where 5 to 7 people are involved to $20,000 to $30,000 for larger businesses where 20 or more people are involved.

Where do you get this investment back and then some in 12 months or less?

  • Clearing up sales issues: communication, teamwork, improved lead quality, targeting the right customer, which can increase sales performance.
  • Developing timely feedback systems that allow people to react to customer issues more efficiently reduces cost and retains customers.
  • Streamlined hiring processes and improved recruiting and interview tools will add qualified and motivated people to your organization.
  • Improved and consistent training about how to perform best practices can reduce cost and improve productivity.

An effective execution of the action plan can produce significant results that exceed the expected ROI producing results not only for the first 12 months but also on a reoccurring basis.  Adopting a continuous process of re-assessment and action plan execution will result in an ongoing experience of improved productivity, increased competitiveness, business growth and financial performance.

A best practice assessment of your business can, under the right conditions, create significant change in productivity and efficiency producing a high Return On Investment.  Success, however, is not a roll of the dice.

A successful assessment is a result of:

  • Careful due diligence selecting an effective assessment,
  • Engaging your staff in a way that collects relevant feedback on best practice compliance, and
  • Measuring organizational alignment, that has been reviewed in a productive workshop environment
  • Conducting an open workshop where each member of the team can contribute openly
  • Creating a believable action plan

Be proactive and begin the process now to select an appropriate and effective assessment process for your business and enjoy the benefits of an attractive Return On Investment.


Note: I refer you to The Baseline Company that offers assessment products for a variety of organizations and score well in the 5 critical factors.

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