Needs Hierarchy

Needs Hierarchy

 

Continuous improvement has to start somewhere.  In order to ensure that you are not only starting in the correct place, but that you are moving in a direction that is in line with the needs and desires of the organization and all of its shareholders, you must first understand the basics of what your needs are. 

The above needs hierarchy is based on what research has found to be the main needs for an organization and their stakeholders.  Above all, sustainability is the most important need for any business.

The hierarchy is built in a pyramid to not only illustrate the level of importance for each section to the benefit and well-being of an organization, but because the implementation of continuous improvement projects, company goals, etc. must follow the same structure.  A focus and emphasis on Gain without having the other four sections of the pyramid properly maintained and grown, will result in a top heavy structure that will eventually topple.  Much like the construction of any tall building, you can’t start at the top and then hope to build a structure underneath it in any sort of efficient or effective manner.  You have to make sure the base is solid before you build on top of it.

 

Gain

This is the ultimate goal for any organization. Gain means that you are in a position to continuously move forward.  You have taken care of the basic needs of your business and stakeholders and now can move forward.  While this may be the ultimate goal for any business, it comes at the top of the hierarchy in based on a level of importance for keeping a business alive versus growing it.

Efficiency

Efficiency is the ability to have an efficient and effective operational environment that is capable of supporting and sustaining organizational change through a systematic progression. 

While efficiency is important in all levels of business development, improvement and structure, its importance in the over the others is diminished by the need to maintain first.  Efficiency by its nature is a growth oriented theme.  As it pertains to this hierarchy, while it adds to the basic needs of a business it doesn’t provide a pathway to meet them.  Because the needs for the first three levels must be met first, efficiency needs will be sidelined in favor of them.  Efficiency models seldom work when the other levels have not met the expectation of the ownership or leadership group.

Engagement

In order for a business to become successful, they must have stakeholders that are engaged in their success.  These stakeholders include partners, clients, customers, employees and vendors.  All of which provide a value to the overall organization.  Getting these stakeholders engaged is the third level in the needs hierarchy.  This is the first place where an involvement is required outside the ownership of the business.  For the first two levels, it is about ensuring immediate survival.  This level is where sustainability becomes part of the need.

Risk Management

Businesses must constantly assess their risks in order to ensure that there is no major concern in regards to the health, safety or well-being of their organization or shareholders. This process of risk management includes a desire to maintain a degree of status quo.  In regards to maintaining the physical health of the business risk management is the second level of needs in an organization.  The adage of preparing for the worst but expecting the best is part of this level.  Risk management includes compliance, avoidance of litigious circumstances, insurance, succession planning and other factors in relation to ensuring the overall health of the organization.

Profitability

When it comes down to it, the bottom line is the bottom line.  A business can’t hope to survive without the ability to handle their bills.  Businesses fail when they can’t afford to do business any longer.  Cash flow is the lifeblood of a business.  Like food, shelter and air to their shareholders, profitability is the sustenance that is required for survival.  While an organization can get temporary reprieve from lenders, banks, etc. profitability must at some point be reached and maintained.