Content

Introduction

Most organizations struggle to understand and manage the hidden challenges within their operations, whether it’s realising the strategy or operational inefficiencies in business capabilities. It's clear, those who develop the ability to understand and effectively manage these challenges often gain a significant competitive advantage.

The Business Health Check (BHC) is designed to help organizations proactively assess, prioritize, and address concerns across their business capabilities. By leveraging the principles of the Viable Systems Model (VSM), the framework establishes a structured approach to improving how business capabilities perform and adapt over time. This enables organizations to identify key challenges, such as poor communication, inefficiencies, misalignments, or risks, and take targeted action to improve performance.

Mechanisms:

Roles: Key individuals within each capability are assigned responsibility for assessing and addressing specific areas of concern.
Feedback Mechanisms: Regular surveys and iterative reviews ensure that actions are informed by the most up-to-date information and that progress is continually tracked.

The solution also integrates tools for mapping challenges and opportunities across broader organizational contexts:

Cross-Capability Mapping: Understand how issues within one capability impact the broader business ecosystem.
Data-Driven Visualizations: Use insights to explore potential solutions, prioritize actions, and align initiatives with strategic objectives.

For organizations already leveraging tools like Business Capability Modeling, the Business Health Check provides an additional layer of actionable insight by aligning operational concerns with broader strategic goals. If you’ve implemented performance tracking tools or risk management solutions, the framework seamlessly integrates to enhance decision-making and resource allocation.

Through structured assessments, actionable visualizations, and collaborative decision-making, the Business Health Check provides a clear pathway to prioritize and resolve concerns. It enables organizations to answer critical questions:

Which business capabilities and organizational units are most impacted?
What risks and inefficiencies are associated with the identified concerns?
How can resources and initiatives be allocated to address the most pressing challenges?
How many issues can be resolved by just communicating more effectively with the right people?
How can progress and outcomes be improved over time?

Ultimately, the Business Health Check empowers organizations to identify, prioritize, and resolve concerns in a way that enhances adaptability, reduces risk, and drives sustainable improvement. Whether your challenges are operational, strategic, or cultural, this solution provides the structure and tools needed to transform them into opportunities for growth.

For a primer on Business Health Check, and why it is important, see Introduction to Business Health Check

Guiding Principles of the Business Health Check

The Business Health Check is built upon a set of guiding principles designed to ensure the process is effective, adaptable, and aligned with organizational goals. These principles provide a foundation for identifying and addressing concerns within business capabilities while fostering continuous improvement and collaboration.

Align Strategy, Operations, and Viability: Ensure business capabilities are self-sustaining, align short-term performance with long-term goals, and connect operational improvements to strategic objectives.
Foster Communication and Collaboration: Enable clear dialogue, psychological safety, and cross-functional teamwork, emphasizing accountability and aligned actions.
Leverage Data and Transparency: Use data-driven insights and clear visualizations to inform decisions, build trust, and maintain stakeholder alignment.
Empowerment and Adaptability: Enable autonomous decision-making at local levels, supported by resources and authority, while fostering adaptability and resilience to respond to risks and opportunities.
Continuous Improvement and Practical Action: Adopt iterative processes with regular feedback, ensuring solutions are actionable, practical, and aligned with broader systems thinking and risk awareness.

By adhering to these guiding principles, the Business Health Check becomes a powerful tool for engagement, meaningful improvements, fostering collaboration, and ensuring that business capabilities remain adaptable, resilient, and aligned with strategic goals.

Purpose

The Business Health Check enables organizations to uncover, assess, and act on critical challenges within their business capabilities, transforming ambiguity into actionable insights. By identifying key concerns, quantifying their impact, and linking them to the broader organizational context through Ardoq’s knowledge graph, the framework empowers leaders to make informed decisions about which issues to prioritize and how to address them effectively. This ensures that resources, sponsorship, and initiatives are aligned to deliver the most significant improvements.

Visualizing and Prioritising Concerns

A key purpose of the Business Health Check is to create an agenda that identifies the current concerns of experts in their fields and to get them to talk about those concerns with their fellow experts. We do this in the Live Business Health Check Dashboard. This use of the bar chart to create the view we want, which filters to exactly the ones we need to facilitate the right conversations between the right people about the right things:

Meeting Agenda prioritized

Effectively, the two people who should be talking to resolve those concerns. Making concerns visible and understanding their impact on the organization is the first step to resolving them. The Business Health Check involves creating structured concern categories, each representing a distinct focus area (e.g., resource allocation, operational inefficiencies, strategic alignment). These concerns are evaluated based on their expert’s level of concern about how this is impacting operational and strategic outcomes. They are linked to the people, systems, processes, or capabilities affected, enabling multi-dimensional analysis and targeted action.

The framework addresses key questions across multiple dimensions:

Operational Impact: What parts of the operation are a concern for experts (e.g., teams, or systems) and are affected by the identified concerns?
Performance and Efficiency: What specific inefficiencies, bottlenecks, or misalignments are hindering optimal performance?
Alignment and Strategic Impact: How do these concerns affect broader business goals and critical business capabilities? (Requires implementation of Business Capability Modeling solutions.)
Risk and Resilience: What is the potential risk if these issues remain unresolved? What is their likelihood and impact on organizational stability?
Prioritization: How should we rank concerns based on their severity, business criticality, and alignment with strategic priorities?
Action Planning: What actions have been agreed and how will they be tracked to ensure progress? (Requires implementation of Strategy to Execution solutions.)

Delivering Value with the Business Health Check and Connected Solutions

The Business Health Check empowers organizations to systematically identify, assess, and address critical concerns within their business capabilities. It provides the insights needed to prioritize which issues demand immediate attention, which should be planned for resolution, and which can be monitored for later action. This process ensures that organizations can articulate the operational and strategic impact of their challenges, and the consequences of leaving them unresolved. With this clarity, leaders can secure the necessary resources and sponsorship to initiate improvement efforts and track their progress. The Business Health Check enables organizations to explore concerns from multiple perspectives:

As a portfolio of capability concerns: Understand the types and prevalence of issues across your business capabilities.
From an operational lens: Identify specific processes, systems, or teams impacted by capability challenges.
From a strategic perspective: Examine how these issues align with or hinder the organization’s long-term goals and priorities.

The Business Health Check also integrates with exiting Ardoq Solutions to provide additional value:

Strategy to Execution: Connect concerns to capability deltas to initiatives established to resolve them, enabling teams to prioritize and track progress toward improvement goals.
Risk Management: Link identified issues to associated risks, allowing for more comprehensive risk mitigation and alignment with the organization’s risk register.
Capability Mapping: Explore how challenges within individual capabilities impact the broader organizational ecosystem, including dependencies across teams and business units.

Why Should You Use The Business Health Check?

One of the most challenging questions a business leader faces every day is, “what now?”

What should I:

Focus on?
Be worried about?
Divert resources to?
Fix or address?
Invest in?
With what priority?
To achieve what?

We believe that Business Capabilities are at the right level to provide the insights that help answer these questions. KPIs, metrics, and dashboards only help if you are looking at the right thing and Enterprise Architect business capability maturity assessments are usually focused on the technology implementation. To be looking at the right thing, we need the insights into what is going on at the capability level. To provide those we need people.

A Business Capability is complex. It's an interaction between many different people, people, process, technologies, information flows, and events and events. Hopefully, what emerges is what our business needs. To put it into context, however, what that means could change every day as the environment the business operates in changes all the time, as do the needs of customers, employees etc. To be able to adapt to these constant changes requires an ability to see what is coming, opportunities, threats, risks, challenges, and to make choices if we should do something new, do nothing or go back to what we used to do.

If we try to control this centrally then we have lengthened the decision-action cycle, and this creates problems for the business but most importantly for the operational staff who need to make real time decisions.

Typically, the Executive function of the business deals with strategic leadership. In the future with a decision-action cycle in weeks and months, even years. The operation though, who are dealing with the here and now have a decision-action cycle in seconds, minutes and hours. Connecting these two, we have middle management that balances operations and strategy. This has some challenges.

Scope and Rationale

Using the Viable Systems Model

The Viable System Model (VSM), developed by Stafford Beer, is a powerful framework for analyzing and enhancing organizational communication. While it was often associated with organizational design, we believe VSM's principles are also suitable for improving communication structures within existing organizations.

By applying VSM as a communication framework, organizations can identify and address communication bottlenecks, ensure effective information dissemination, and maintain adaptability in complex environments.

Where to use it?

The Business Health Check is applicable across all organizational capabilities and aims to enhance operational effectiveness while aligning with strategic goals. It leverages predefined perspectives, structured assessments, and iterative feedback loops to uncover key issues and drive actionable outcomes.

Key Elements

Assessments and Feedback Mechanisms:
- Surveys and scoring rubrics provide a structured way to gather insights from key stakeholders.
- Outputs include prioritized agendas for capability reviews and progress tracking.
Visualizations and Dashboards:
- Provide clarity on the level of concerns.
- Enable multidimensional analysis across operational units, strategic goals, and risk areas.
Collaborative Framework:
- Establish communication channels between individuals responsible for operational execution, coordination, control, strategic planning, and governance.
- Foster cross-functional collaboration to address concerns and improve performance holistically.

Inclusions

The Business Health Check encompasses:

All business capabilities: Applicable to both operational and strategic levels of the organization.
Predefined concerns: Focused on key areas such as resource allocation, operational efficiency, adaptability, and governance.
Feedback and actions: Structured reviews that cause actionable insights and clear responsibilities for resolution.
Integration with other solutions: Supports risk management, initiative tracking, and strategic alignment when connected with complementary tools.

Exclusions

The Business Health Check does not:

Provide direct solutions or deliver improvements. It highlights areas for investigation and action.
Act as a financial or maturity assessment of capabilities.
Replace operational tools or management systems but complement them by identifying systemic concerns.

Boundaries

The framework is intended to work within:

Defined organizational structures where business capabilities and their related systems are identifiable.
Existing business capability models and supporting tools such as strategy-to-execution solutions, where applicable.
A collaborative environment that fosters open communication and alignment across roles and teams.

Deliverables

By implementing the Business Health Check, organizations can expect:

Clear identification of capability concerns.
Prioritized action plans linked to operational and strategic goals.
Enhanced collaboration and accountability among stakeholders.
Improved visibility into progress and continuous monitoring of capability performance.

This scope ensures the framework is a powerful tool for fostering adaptability, driving performance, and aligning business capabilities with broader organizational success.

The Business Health Check in Ardoq

The Health Check Metamodel

The Business Health Check consists of a few very important components.

Firstly, you will set up a Health Check workspace where you will capture your Health Checks using the Business Health Check component type. The health check component consists of several fields that capture the experts feedback (highlighted in green). The summary survey fields (highlighted in pink) are used to capture outcomes, schedule new surveys, etc. And the fields without highlights are for the Live Business Health Check dashboard, which provides the insights and agenda for the experts meeting.

When a new Business Health Check is created, A Has Subject reference connects the health check to the target business capability component. This allows you to repeat the same business health check survey as often as necessary.

Experts are needed to provide feedback on the capability. The way the experts are identified is through the Is Expert In reference for the relevant Business Capability,if the capability already has experts referenced they will automatically appear as selected experts. If no such references exist, use the Is Expert In reference and select your new expert. The user is then prompted to specify the areas of expertise for each expert, which are subsequently recorded in the Expertise field of the Is Expert In reference.

During the health check process, you will be invited to identify a capability delta. Capability Deltas are an important part of the realization process of health checks because they take the output of the health check and connect it to an actual change within the organization enabling you to see how the assessment will improve the capabilities. If a Business Capability delta is selected, when it is submitted a Depends On reference is created from the business capability to that delta. To learn more about how capability deltas are realized read the Strategy To Execution: Purpose, Scope and Rationale.

For a more detailed explanation of the Business Health Check component, reference, and field types, please review the Metamodel document here

How is the process implemented in Ardoq?

The Business Health Check Process

The Business Health Check assessment can fully support an organization only when embedded into a recurring process. This approach ensures regular check-ups that clarify priorities, consistent communication to foster alignment between functions, and rapid identification and resolution of problems. Prioritized action plans and updated risk registers guide decision-making, while high engagement levels drive progress and create the potential for semi-autonomous operations.

This is done by following a few critical steps:

Identify the business capability(s) that need to be assessed
Identify and survey the capability experts
Synthesize assessment results and meet to discuss their concerns
Create outcomes such as capability deltas

By following this process, we can identify the business capabilities that need to be assessed, engage capability experts to gather insights, synthesize assessment results, and address their concerns. This enables us to identify capability deltas (gaps or areas for improvement), prioritize and target enhancements, align capabilities with strategic goals, and develop actionable plans. Ultimately, this drives informed decision-making, improves organizational efficiency and resilience, and promotes continuous improvement to ensure long-term business viability.

Key Elements and evidence for our Approach

Mapping Current Roles to the Five VSM Systems:
- By identifying individuals in a business capability who align with the responsibilities of the five VSM systems (Operations, Coordination, Control, Intelligence, and Policy), we create a framework for understanding how the capability functions.
- Research Support: Leonard (2007) [1] emphasizes that the strength of VSM lies in mapping existing organizational roles to its systems, which can provide clarity without requiring structural changes. This approach supports communication by defining clear areas of responsibility and concern.
Assessing Levels of Concern:
- Gathering feedback from these individuals on their level of concern regarding predefined areas (e.g., resource allocation, strategy alignment, operational effectiveness) enables us to pinpoint misalignments or areas needing attention.
- Research Support: Beer (1985) [2] advocated for using feedback loops to gauge the “health” of systems. This aligns directly with our idea of diagnosing viability through perceived concerns.
Facilitating Communication and Self-Improvement:
- Bringing these individuals together to collaboratively address concerns fosters a system of self-regulation and continuous improvement.
- Research Support: Espinosa et al. (2004) [3] demonstrated that fostering communication between different VSM systems can create self-correcting organizations capable of responding dynamically to internal and external challenges.

Strengths of our Approach

A notable resource that delves into this application is the article "The Viable System Model: A Framework for Understanding Organizations" by Raúl Espejo and Antonia Gill. This work provides an in-depth exploration of how VSM can be utilized to comprehend and enhance communication processes within organizations, focusing on the dynamic interactions and information flows that contribute to organizational viability. [4]

Focus on Communication Over Structure:

Why This Works: VSM was designed with an emphasis on communication and feedback loops. Using it to enhance communication aligns with its original intent.
Evidence: Schwaninger (2006) [5] highlights that the essence of VSM is its ability to establish effective communication and feedback across organizational levels, ensuring both stability and adaptability.

Empowering Individuals Through Collaboration:

Why This Works: Engaging people directly in identifying and addressing concerns creates ownership and accountability, leading to better alignment and engagement.
Evidence: Research by Leonard (2009) [6] found that involving employees in diagnosing and addressing systemic issues significantly enhances the system's adaptability and effectiveness.

Enabling Self-Regulation:

Why This Works: A VSM-based communication framework allows business capabilities to identify and resolve their own issues without relying on external intervention, increasing autonomy and efficiency.
Evidence: Pérez Ríos (2012) [7] observed that self-regulating systems, as supported by VSM, are more resilient and responsive to changes.

Connection to Enterprise Architecture:

The Viable System Model provides a theoretical foundation and governance structure for understanding and managing organizational complexity, while Enterprise Architecture offers the practical tools and frameworks to implement these principles.

EA operationalizes VSM by:

Mapping systems (capabilities and processes) in alignment with VSM components.
Supporting adaptability (through future-state architectures).
Enabling communication and feedback loops (through modeling information flows).
Ensuring alignment between strategy (System 5) and operations (System 1).

In essence, VSM is the ‘why’ and ‘what’ of viability, while EA is the ‘how’—providing actionable frameworks, tools, and insights to ensure organizations are viable, aligned, and adaptive.

Bibliography

[1] Leonard, A. (2007). The Viable System Model and Organizational Communication. Kybernetes.

[2] Beer, S. (1985). Diagnosing the System for Organizations. Wiley.

[3] Espinosa, A., Harnden, R., & Walker, J. (2004). A Complexity Approach to Sustainability: A Viable System Model Intervention in an Amazonian Eco-community. Systems Research and Behavioral Science.

[4] Espejo, R, Gill, A. (2002)The Viable System Model as a Framework for Understanding Organizations by United Diversity Library

[5] Schwaninger, M. (2006). Intelligent Organizations: Powerful Models for Systemic Management. Springer.

[6] Leonard, A. (2009). The Viable System Model and Its Application to Complex Organizations. Kybernetes.

[7] Pérez Ríos, J. (2012). Design and Diagnosis for Sustainable Organizations: The Viable System Method. Springer.

To enhance your Business Health Check tool in Ardoq with actionable diagnostics and real-time assessments, consider the following resources that align with the Viable System Model (VSM) principles:

"Design and Diagnosis for Sustainable Organizations: The Viable System Method" by José Pérez Ríos
This book offers practical methodologies for diagnosing organizational health using the VSM framework. It provides step-by-step guidance on assessing and designing viable systems, which can inform the development of diagnostic features in your tool.
Springer Link
"The Neurology of Business: Implementing the Viable System Model" by Raul Espejo and Alfonso Reyes
This resource delves into the application of VSM in real-world business scenarios, emphasizing diagnostic processes and actionable insights. It includes case studies that demonstrate how VSM can be used to identify and address organizational issues effectively.
Springer Link
"Application of Viable System Model in Diagnosis of Organizational Structure" by Mohammad Ali Sadeghi and Mohammad Reza Radfar
This article presents a developed methodology for applying VSM as a diagnostic tool to identify weaknesses in existing systems. It outlines a structured approach to system identification, diagnosis, and improvement, which can be directly applied to your Business Health Check tool.
Springer Link
"Guidance on Applying the Viable System Model" by Markus Schwaninger
This paper provides detailed guidelines on conducting a VSM diagnosis along with qualitative research methods. It emphasizes data collection, analysis, and presentation of results, offering a comprehensive approach to organizational diagnostics.
Emerald
"The Viable System Model: An Introduction to Theory and Practice" by Patrick Hoverstadt
This introduction to VSM covers both theoretical and practical aspects, including its use as a diagnostic tool. It offers insights into mapping organizational structures and assessing them against VSM criteria, which can enhance the diagnostic capabilities of your tool.
ScienceOpen

These resources provide actionable methodologies and case studies that can inform the development of diagnostic features in your Business Health Check tool, ensuring it effectively assesses and enhances organizational viability.