How to mitigate the risks of operational assessments Featured

4:06pm EDT January 19, 2012
How to mitigate the risks of operational assessments

Once strategic objectives are set by a company’s executive team and its board of directors, managers must move to enable the business’s operations to achieve these goals.

All businesses face risks in pursuing objectives. Operational assessments assist businesses in mitigating process design and execution risks associated with the achievement of the operational objectives.

“Operational assessments assist organizations in achieving their objectives by ensuring that strategic goals are appropriately translated into process design and execution objectives, and that the risks associated with the achievement of these operational objectives are mitigated,” says James P. Martin, CMA, CIA, CFE, managing director of Cendrowski Selecky PC. “Different procedures must be followed depending on which of these assessments is being performed.”

Operational assessments, however, are not without their own pitfalls. This month’s issue concludes a three-part series of interviews with Martin by examining frequent operational assessment pitfalls. Pitfalls pertaining to both process design and execution assessments are addressed.

Interested readers are encouraged to view Cendrowski Corporate Advisors’ Operational Assessment Guide, included in this month’s issue of Smart Business, as well as previous months’ interviews with Martin at

Smart Business spoke with Martin about pitfalls commonly encountered in process execution assessments and process design assessments.

What are some common pitfalls in process execution assessments?

One of the first steps in performing process execution assessments is interviewing employees. By conducting interviews, an assessor can determine the tasks that are performed by process operators, as well as the risk mitigation procedures they follow in performing those tasks.

Interviews, however, can present an assessor with misleading information and a potential false sense of security. For instance, an employee may be able to readily identify risk mitigation procedures associated with his or her tasks; whether or not the employee actually follows these procedures is a different story.

In order to guard against this issue, an assessor should not only interview process operators but also observe them as they perform their tasks. Observation will, preferably, occur after a professional rapport has developed between the assessor and the process operator, and the process operator feels comfortable in the presence of the assessor. If an operator is fully conscience of an assessor’s observation, and is uncomfortable with the observing party, he or she may alter usual behavior.

This is undesirable, as an assessor most wants to observe how a process operator conducts himself in the absence of out-of-the-ordinary supervision.

What are some common pitfalls in process design assessments?

A process design assessment examines risks that prevent the achievement of process design objectives and, indirectly, strategic objectives. A portion of this assessment involves the evaluation of the impact and likelihood of process design risks by process designers. (The impact associated with a risk represents organizational consequences in the event that the risk is realized, while the likelihood represents the chance or probability that the risk will occur.) Process designers may have differing views regarding the impact and likelihood of risks, and in some instances these differences may be significant.

When an assessor encounters such differences, it is essential that he take the time to examine the discrepancies, as well as consensus impact and likelihood values. When a process designer views a risk differently from his peers, he may have unique knowledge of a risk. This knowledge may arise from the designer’s intimate involvement with a process, his knowledge of the organization’s internal environment, or through other means.

No matter why they occur, discrepancies in risk estimates represent an important component of operational assessments, and one that assessors must carefully analyze and not gloss over.

Once an assessment has concluded, how can those who conducted an operational assessment ensure that recommendations and improvement plans are followed subsequent to the assessment’s conclusion?

Follow-through on recommendations and plans begins with the assignment of clear roles and responsibilities to team members who take charge of the improvement effort.  The success of an improvement initiative depends on the success of each individual team member; if one fails to achieve his or her individual goals, this failure may derail the entire improvement plan.

Monitoring by higher-level managers and/or the board of directors serves to mitigate this risk. In addition to monitoring, merit pay tied to the achievement of improvement items may be awarded to further incentivize leaders to achieve established goals.

What additional resources exist for organizations looking to perform operational assessments?

Interested parties should sign up to receive Cendrowski Corporate Advisors’ complementary Operational Assessment Guide at

assessments-overview.php. It’s an excellent starting point for any organization looking to perform an operational assessment.

James P. Martin, CMA, CIA, CFE, is managing director for Cendrowski Selecky PC. Reach him at or (248) 540-5760.