Operational Audit: Leadership

When I conduct an operational audit, whether in my former life in healthcare or in my current role, I always begin by assessing leadership’s ability. The primary reason why I start here is because if leadership is lacking, it will not matter how good the systems or processes are, the department or organization will be underperforming. Leadership of a department or organization is like the steering wheel of a car, it takes you where you want to go. Without the steering wheel, the car will still move but the chances of it going in the direction it should are slim to none.

To accomplish this leadership assessment I have created a Leadership Matrix (you may contact me and I will share it with you). I have selected criterion that through my experience is critical to successful leadership. I then assigned a weight to each area. Please note that your criterion and weights may vary but the objective is the same. To utilize a tool that will help us assess leadership as objectively as possible.


My criterion consists of six areas; Employee Morale, Proactive/Solution Driven, Time Management, Deliverables, Ownership, and Communication. All of these are necessary to be a successful leader, but for assessment purposes, we must be able to set weights to these based on what is most important for success to be achieved. As a result, I have weighted ownership and employee morale the highest at 25% each.


If a leader does not take ownership of his department or organization, it is only a matter of time before he leaves or is removed. A leader must be recognized by his team as the leader otherwise the department or organization manages itself, and when that happens, chaos ensues. Additionally, if the leader is not capable of creating an environment where employee morale is high, productivity, quality, and the overall environment of the organization will suffer. There has to be clear ownership, and the morale of the team must be high and both are a direct reflection of leadership’s ability.


The next highest weight is for communication at 20%. If a leader is not able to clearly communicate the vision and the direction the department needs to go—it simply won’t. But not only is it important for a leader to be able to clearly articulate the vision, the leader must also be able to communicate when conflict arises, push back takes place, or discipline must be administered. If the leader shies away from this type of communication, a change must be made. The negative impact on the rest of the department or organization by avoiding conflict or accountability is too great.


The last three areas of the evaluation are weighted at 10%, proactive/solution driven, time management, and deliverables. As you can probably decipher that to be a successful leader you must be proactive and driven to find solutions. Who do the employees go to when they are stumped and need help identifying the next step—the leader. So if the ability to be proactive and find solutions are lacking, consideration must be made with regards to their overall ability as a leader. Furthermore, if the leader does not possess the ability to manage their time accordingly and ensure that projects are delivered by the due date, on budget, and at expected quality—then leadership is deficient.


I’m sure you’re probably asking by now so how do you determine these things? Luckily some of these deficiencies will become apparent just by you knowing to look for them. Others may take a little investigating. The best way is to talk to people. Talk to the leaders subordinates. You will quickly be able to pick up on trends and gauge the overall morale of the department or organization. The next step is to talk to the leaders customers. How do they assess his ability? Is he delivering on the commitment he makes? Is the product or service at the level of quality that was expected? Bottom line—is the customer happy?


Once I have done my due diligence I do my best to objectively rate the leader in each of the six areas of focus on a 1-5 scale. The matrix then provides me with a weighted score that I then compare against my pre-determined rating scale: Unsatisfactory - 1-1.9, Underperforming – 2-2.9, Fully Competent – 3-3.9, Very Commendable – 4-4.9, and Distinguished – 5. The outcome of my Leadership Matrix helps determine the next steps. The leader will either be not qualified to lead the department or organization, they will need development, they are performing well, or they are exceeding expectations. If the matrix has resulted in any score below a 3, you must take action to improve this leader, or remove them from their duties.

Operational Audit

I often get asked, “How do I know if my department or organization is efficient and meeting expectations?” The other frequent statement I hear is, “I know that things are not working right, I don’t have happy customers, but I just can’t figure out what it is.” If productivity, quality, turnover, customer satisfaction, cost, etc. is below expectations, then you need to conduct an operational audit.

This series will focus on each of the seven assessments that are critical in conducting a full operational audit. By conducting these seven assessments you will know exactly where you weaknesses, strengths, obstacles, and opportunities lie. This is different from a SWOT analysis as we will primarily focus on your internal operations and does not evaluate your competitors or external factors (possibly at a later time). This takes a detail look at you and your operations. We’ll take the time and discuss each of the following functions in detail so they are practical and applicable to your industry, department, or organization. We will discuss Leadership, Staff, Quality, Integration, Productivity, Supplies, and Financial aspects. I invite you to follow along as we work our way through this series. And as always, if you have specific questions or comments, share so we can all benefit from them.