What is organizational diagnosis?
When we are sick, we go to a doctor to find out what is wrong with our body.
After diagnosing the problem, we are prescribed a remedy or some other method to cure what is making us sick.
In the case of business strategy, the reasoning is very similar.
For organizations, business strategy analysis (diagnosis) is a tool that presents a broader, clearer and more accurate view of various aspects of the company.
It is a procedure that aims to highlight problems and opportunities, as well as allow a manager to make more assertive strategic decisions.
By doing an efficient analysis, managers and business owners become better acquainted with the business and can chart a path that will lead them to achieve better results.
This procedure makes it possible, through a direct approach, to propose solutions to what actually compromises the “health” of the company.
This makes it stronger and more prepared to face an increasingly competitive market.
But how do you do business strategy analysis?
Check out a step-by-step guide below that will help you accomplish this important task.
Check it out!
An effective analysis involves different areas of the company: finance, marketing, sales, human resources, logistics, processes, etc.
The first step is to collect as much information as possible about all the activities the organization is involved in.
There are a few methods that can help you in this step, such as conducting interviews.
Go to managers, supervisors and other employees and ask them about the current situation in their respective areas.
But first, work out a script with questions to ask.
Another method of collection is the periodic reports from each area department.
These documents contain very relevant information on procedures, decision-making processes and results obtained.
How about doing a field observation?
This way, you will see the work routine of the company: how the employees operate, how the procedures take place in practice, what the main errors are and the correct solutions, etc.
Remember that for field observation to be effective, it is critical that the observer does not interfere with the execution of the activities.
There are other ways to get to know your business better: Strategic Planning examples for use in business for each step of the process
Now that you’ve collected the information you need, it’s time to organize and analyze it.
For this, you can make use of spreadsheets, charts, maps, tables, etc.
The purpose here is to make the data available in a way that facilitates analysis.
Tip: separate each situation or problem by category. In this way, it will be possible to establish priorities and solve whatever is most urgent.
There are numerous data analysis tools. See some below:
After collecting and analyzing your company’s most relevant information, it’s easier to identify the issues it faces.
What’s more: you can find the root of such problems.
In this third step of business strategy analysis, an in-depth investigation is done to find out what the causes of these bottlenecks and problems are.
The Ishikawa Diagram is one of those tools that can help you a lot in this stage.
It classifies the causes of your problems into 6 types.
They are as follows:
Many problems are caused by machine and equipment malfunction.
Problems related to raw materials are very common and can cause significant damage.
So choose your suppliers well and maintain a good relationship with them.
Poorly trained, unable, unqualified or unmotivated staff may impair the performance of activities.
Here, problems are related to a company’s internal environment (lack of space, incorrect layout) as well as the external environment (pollution, bad weather).
Do you usually measure your company’s processes?
If not, be aware that by not doing this you can jeopardize the progress of activities and generate rework.
Remember a phrase from Deming, regarding total quality:
“You do not manage what you do not measure yourself”
This last aspect observed in the Ishikawa diagram concerns the problems caused by the methods that the organization uses in the execution of its activities.
See more in our blog: What is the Ishikawa diagram and how do you use it?
It’s not enough to only know the faults in your business.
You need to ask yourself: What can be done to improve this situation?
Based on the information collected and analysis done, bring your team of managers together and propose solutions that can effectively correct whatever is preventing your business from growing.
However, it is worth remembering that these measures will not be completed overnight.
Everything needs to be strategically thought out, with a well defined action plan.
Now that you know all about business strategy analysis, don’t waste anytime, get started on your own company’s strategic analysis!
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