Assessment validity

Since the beginning of its development in 1996, the assessment has been used in a broad variety of middle market firms. Even across this diversity of companies in diverse industries, the assessment has demonstrated its effectiveness and usefulness in identifying the critical issues and strengths for each firm. The assessment has been used in middle market businesses in industries ranging from agriculture, high tech manufacturing and financial services, to wholesale distribution and trucking.

Although the data is processed and reported numerically--which might suggest a certain degree of precision--the understanding derived from the assessment is not numerical, but rather a descriptive view of the strategic and succession risks and strengths facing the firm. This is accomplished by ranking the sixteen key factors that the assessment analyzes into three zones--Abundance, Risk, Deficient--that clearly show relative degrees of strength and weakness. We have found this to be the clearest, most easily presented and assimilated metric for understanding the complex issues facing the owners of a private business.

Because this tool aggregates data to create a composite view of the firm that is generally reflective of the "group" view, the accuracy and reliability of the tool can be influenced when the number of participants is very low. With a very small number of participants (2 or 3), the results can be skewed by extreme or unrealistic opinions or outright dishonest answers. The effect of these "outlying" viewpoints diminishes rapidly as the number of participants increases. A generally reliable view can be achieved with five or more participants, even if some answers are inaccurate. Results become highly stable at approximately twelve participants, with additional participants beyond twelve adding negligible influence.

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