- Business Triage
Business Triage provides a
framework for business decisionmaking, outcome/ goalprioritization and resourceallocation in many business environments. Business triage involves categorizing desired outcomes/goals and the processes that support those outcomes/goals based on their relative importance to achieving a stated, measurable goal or outcome. Using the same triagecategories employed by militarymedical and disastermedical services, business processesare categorized as essential/critical (red) important/urgent (yellow), or optional/supportive (green).
In a business triage model, resources are allocated based on the outcome/goal and process category/rank with resources first dedicated to Red, then Yellow and finally Green categories. In the event that resources become limited, resources are first withheld from Green, then Yellow categories. Resources are only withheld from Red categories if
failureto achieve outcomes/goals is acceptable.
Application & Technique
The application of business triage to new and established businesses requires a detailed examination of the desired outcomes and goals for the business in question. Internal outcomes and goals such as building maintenance and employee safety must be included in the inventory along with the more obvious external outcomes and goals such as product sales and delivery of services to the end customer. The more detailed this examination, the more accurate and helpful the subsequent use of resources.
Once the internal and external outcomes and goals examination is complete, these must be categoried based on their relationship to the core mission and values of the company. Outcomes and goals are categorized as triage is categorized above.
Within each category, the desired outcomes and goals are ranked based on the "threat" presented to the company if the outcome or goal is not achieved and the level of "outrage" that will occur should the threat be realized. This "threat" and "outrage" relationship is calculated as a PIVOT score where:
"Threat" = "Probability" x ("Impact" + "Vulnerability")
PIVOT Score = ("Threat")"Outrage"
The greater the PIVOT Score, the higher the relative priority within the triage category.
After outcomes and goals are triaged, the processes that support each outcome or goal are triaged according to the same relationships described above. Processes are first categorized with the same categories as above.
Again, within each category the processes for each outcome are ranked based on their respective PIVOT Score with the higher relative priority within a triage category given to the processes with the greater PIVOT Score.
Finally, available resources, including money, materials and personnel are allocated based on the relative triage and ranking of the desired outcome/goal to the processes that contribute to achieving that outcome/goal with the highest ranking process receiving resources before lower ranking processes within each outcome/goal grouping.
First described in the late 1990's, business triage grew out of the need for a reproducible method for the allocation of limited resources (especially money) by start-up and expanding businesses. The concepts utilized in business triage were drawn from the real world experience of managing limited resources in the high stakes environments of battle fields and disaster scenes. Process analysis methods similar to those used by information technology professionals and later
business continuityprofessionals were added to better identify the processes that support the desired outcomes and goals.
Example of Business Triage
A small southeastern manufacturing plant sought to expand production by the addition of an additional milling station without incurring debt or drawing down significantly from capital reserves. Cash flow from current business was sufficient to support the business's daily operations and contribute to a constant growth in cash reserves. The business had sufficient orders to maintain output at 92% of capacity even after the addition of the new milling station and the added revenue for the station would pay for the purchase within 11 months. The limiting resource for the expansion was funding within the company's values/goals. Applying the principles of business triage, the company identified the purchase of the additional milling station and the avoidance of debt as Essential/Critical (Red) outomes/goals, while the preservation of capital reserves was determined to be an Important/Urgent (Yellow) outcome/goal. A planned revision of the company's image package (logos, business cards, letterhead and website) was triaged as a Supportive/Optional (Green) outcome/goal.
Processes that support the Essential/Critical outcome of purchasing the additional milling station included ordering the equipment, modifying space allocation in the manufacturing plant, paying for the equipment and installation, training personnel on the new equipment and hiring additional mill operators along with paying the expenses associated with obtaining the new milling station out of current cash flow and capital reserves.
Processes that support the Important/Urgent goal of preserving capital reserves included paying the expenses associated with obtaining the new milling station out of current cash flow and repaying any use of capital reserves out of new revenues from the new milling station.
Processes that support the Supportive/Optional outcome/goal of revising the company's image package included paying a marketing consultant and graphic artist to redesign th image package, printing new letterhead and business cards, updating the website design through an out of house webmaster and updating all advertising to match the new image package.
Finally, Resource Allocation based on the above business triage analysis resulted in the temporary delay of the corporate image package revision and allotment of those resources to the purchase of the new milling station. Similarly, even though maintaining capital reserves was an Important/Urgent outcome/goal, avoiding debt was an Essential/Critical outcome/goal thus capital reserves were also used to fund the purchase the new milling station. The increased revenue from the newmilling station was used first to restore capital reserves, then placed in the general operating fund which later paid for the revision of the corporate image package.
Alan Davis. "The Art of Requirements Triage," Computer, vol. 36, no. 3, pp. 42-49, Mar., 2003
Robert Docters. Improving Profitability Through Product Triage. Business Horizons. Jan-Feb 1996.
*EBS Knowledge. “Practicing Triage for Survival.” http://www.ebstrategy.com/insights/ResearchInsight-TM1-032901.htm. 2006.
Cliff Ennico. “When Cash is Tight, Who Gets Paid?” Entrepreneur. (On-Line Edition) March, 2002. (also appeared in the Chicago Sun Times March 26, 2002
Mark George. “Using Triage to Manage Process Workloads in Service.” http://finance.isixsigma.com/library/content/c040101c.asp. 2007.
Lynn Grodzki. “Triage for Your Practice.” Psychotherapy Networker. Sep/Oct, 2006.
Janet Zich. Business 911: Triage for Trying Times. Stanford Business School Magazine (On-Line Edition). June 1994.
Wikimedia Foundation. 2010.
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