Assurance is defined as a promise or confirmation that something is or behaves as expected. It represents confidence, security or commitment that something is happening as we assume or will happen as we presume. Within an organisation, senior leaders often expect to receive business assurance from their management teams. Some examples of assurance might include: that a target can be delivered; that a systems investment will generate the expected benefits; that processes are scalable as you grow. Ultimately, directors and senior leaders want to know that the organisation is delivering as it should. How it goes about that may be vastly complicated but management, teams, processes, controls, suppliers, equipment and software should come together effectively. That is, to deliver the organisation’s mission, performance and targets with efficiency and effectiveness. Read how to obtain business assurance over people, processes, partners and systems.
Business assurance over people
Many businesses start and end with people. From sales to service, people are involved along the way. People have a range of roles from converting orders to inputting invoices or delivering goods to an online support chat. In every case, those people have an important role to play. All of them will perform the role in a different way or perform at a different level. Not all of them will follow the same processes and not all of them will behave as you expect. Since we are human beings rather than robots, there is great variability in behaviour and performance. Clearly, we are not suggesting that everyone becomes robotic or is replaced by ChatGPT. However, there are things that management can do to assure consistent performance.
Organisational Design (OD) supports the realignment of organisational resources to achieve its needs and targets. By establishing the correct structure, reporting lines, governance, culture and roles, you align your people to delivering the strategic objectives of the business. In too many organisations, the OD is rigid, dysfunctional and at worst, suffocating. It goes without saying that you first need to identify your Target Operating Model (TOM), or how you progress from the as-is state to the to-be state. This defines how the corporate strategy is applied to the organisation and is the foundation to building operational plans. We know from past experience that work on the TOM is key to retaining talent.
More tactically, department and team structures are not always optimal. This gives rise to poor Employee Experience (EX) and staff attrition. Don’t be afraid to focus on specific departments or teams. Similarly, as we have seen, managers are not always the right enablers for what you want to achieve. On occasion, managers are simply too overwhelmed with tasks to improve the organisation. The result is sub-optimal levels of engagement, development and performance. Make sure that your hiring process is working for you and that you develop those with management potential. Furthermore, team member and supervisor performance is largely predicated on learned behaviours, habits and shortcuts. The result is error, re-work, criticism and even conflict if staff fail to take responsibility. Make sure that roles are clear, standards are enforced and bad habits addressed.
Assurance over business processes
There is not a single business in the world whose processes work flawlessly. Many businesses try to streamline and standardise process flows so that errors, waste and delays are minimised. Others focus on what is important to the customer to increase quality and the perception of value. However, not all areas are subject to standardisation. In fact, some attempts may conflict with the TOM to deliver corporate strategy. Take Ocado’s robotised warehouse. Despite the impressive level of automation, the robots cannot handle oddly-shaped items or those that need to be weighed. These exceptions are handled by staff. It also constrains what the warehouse might hold with clothing potentially presenting difficulties for example.
Similarly, if we take a sporting analogy, F1 is a motorsport that designs cars within a set of rules. Teams use mathematical models, simulators and wind tunnels to estimate the performance of parts of the car. Despite following rigorous quality control processes, stress tests, crash tests and simulations, these ‘developments’ don’t always work as expected. Somehow, even at the pinnacle of motorsport with employed specialists and assurance, one team dominates and others struggle to make improvements. There may be a number of reasons for this, such as complexity, specialist bias and assurance.
Fixing broken processes, identifying failures, reducing waste and improving quality are all possible. Many organisations have transitioned to a culture of ongoing improvement. Continuous Improvement (CI) uses tools and techniques such as Kaizen, Kanban, PDCA (Plan, Do, Check, Act), A3, TQM (Total Quality Management) and Lean to make gradual, broad organisational improvements. Quality management frameworks such as ISO (International Organisation for Standardisation), CMMI (Capability Maturity Model Integration), Six Sigma and other industry specific rules (e.g. AS9100 in aviation, ISQM in audit) support CI. Six Sigma is more focused on customer needs and what is Critical-to-Quality (CTQ). Additionally, techniques such as Customer Journey Mapping (CJM) and Service Blueprints support Customer Experience (CX) and process improvement.
Assurance over your business partners
How many partners or suppliers does your business have? They possibly number in the hundreds or thousands depending on your scale and reach. All of them need to adhere to rules and regulations in their domestic territory and/or your own territory. All of them employ people but some may subcontract work, supply raw materials or harvest crops. Of these, some may operate in emerging economies with lower labour costs. Others may be located in jurisdictions with different tax, religious, political and economic systems than our own. Some may be high emitters of CO2, use polluting chemicals or ecologically damaging methods.
In summary, your partners are a source of risk for your brand, your reputation, your people and your customer experience. So, why for example do suppliers get caught out not using sustainable sources of wood? Why do disruptions from weather, politics, economic shocks, pandemic and civil unrest unsettle your much relied-upon supply chains? To address risk in partners, some companies deploy an Integrated Management System (IMS) – designed to incorporate health & safety (HSWA 1974), environmental, quality, security, energy and asset management. An example might cover accreditations in ISO 9001, 14001 and 45001.
There are various environmental certifications such as CHAS, Green Mark and Planet Mark to look for in suppliers. There are also certifications such as B-Corp, greenhouse gas accounting standards such as GHG Protocol and upcoming IFRS S1 and S2. Many organisations have been quick to boast of their ESG (Environmental, Social and Governance) performance or their UN SDG (Sustainable Development Goals) commitment. However, inadequate risk management, governance, monitoring, audit and a temptation for marketing greenwashing have contributed to some high-profile embarrassments. For example, Shell had 2 adverts banned for quoting their ‘green’ credentials whilst ignoring the ‘dirty’ fossil-fuel side of the business. Drax was caught using wood from primary forests in Canada rather than sawdust and waste wood for pellets they burn.
Assurance over your systems
Some of the areas covered do apply to systems also. However, there are specific rules around data protection such as the EU General Data Protection Regulation (GDPR) and the UK’s implementation via The Data Protection Act 2018. We also know that some high-profile organisations fall victim to cyber-attack, such as the MOVEit hack affecting payroll systems (BA, Boots, BBC etc). Worse still, organisations base decisions on systems built on rules, data and calculations, which don’t always get it right. Just ask Post Office following the Horizon debacle and prosecutions between 1999 and 2015.
Alternatively, if bad data is entered into a system or missing entirely, the effect may be hidden. Before concluding that your system is watertight, consider if all of your invoices are generated, all of your margins are as you expect and pricing changes applied rigorously. Many businesses lose revenue and/or margin in the ‘noise’ of their data and ‘hidden’ calculations in their billing systems. In terms of customer records, notably for use by sales and marketing, it is common for Customer Relationship Management (CRM) error. Yes, that’s right, not everything is recorded correctly or completely or at all. Unfortunately, that means that some customers do not receive communications, some get the wrong message and some at the wrong time leading to lost sales.
The list of potential system issues is endless. For example, your systems may be coming to the end of their useful life. Perhaps your support contract is expiring. Perhaps a clause in the contract means you need to pay for future updates. Maybe, neglect of the system lifecycle has left you without an upgrade path and now a large system migration is the only option. There has also been many stories about bias coded into algorithms and artificial intelligence (AI) influencing advertising, recruitment filtering and even forecasting. Sometimes, it pays to seek assurance over your IT system estate.
Confidence in your business operations
Here at Think Beyond, we believe in doing business properly, professionally and scalably. We support senior leaders in achieving their targets and improving business performance. We provide assurance, risk management and process-mapping services to give you confidence that things work as expected. Additionally, we support your management layers with the skills and culture to continuously improve. We can support identification of your strategic objectives, defining your target operating model and designing your organisation. Once the business is pointing in the right direction, we can provide business assurance around your people, processes, partners and systems.
If you would like to increase confidence over your business, simply drop us a short email to set up a free initial chat. Alternatively, you can request a call back via our online form.
Finally, why not read a related article about the value of good corporate culture.