My father-in-law, a retired Air Force Colonel whose major ailment at 91 is acute irascibility, had difficulty sleeping and was examined by an intern at least 60 years his junior. The intern asked if he ever ground his teeth at night. When the colonel said "No," the intern responded, "Now, how do you know you don't?" My father-in-law looked directly at him and said, crustily, "Because I don't have teeth at night, sonny."

Most of us, hoping to avoid my father-in-law's excuse, make regular trips to the dentist, usually twice a year. In addition to the regular cleanings, we often get an annual x-ray to make sure nothing is going on that isn't readily apparent to the hygienist.

As important as regular dental appointments seem to most of us, it is curious that a regular checkup of our businesses doesn't have the same priority. Too frequently, I have seen a troubled company in or near bankruptcy whose warning signs were visible for months or years prior to then without management recognizing them.

It is too simplistic to say management failed. In many ways, the management team was committed and experienced. They had implemented initiatives to map their processes meant to improve their performance and had embraced all the latest tools such as Lean and Six Sigma to run their businesses. Yet, despite that, the business one day found itself uncompetitive and losing money, with management at a loss as to why.

However, an annual check up might have revealed a couple of subtle problems that, had they been addressed early enough, would not have grown into the bigger obstacles they became. For example, for a while sales were growing and profitability was up. However, by looking more closely, management might have determined that sales were up because the market itself had grown but their market share was actually down. Profitability was up because of a number of price increases that offset some fairly significant cost increases. Meanwhile, customers were increasingly disgruntled about the price increases and poor service and were testing competitors to find a suitable alternative. As it turned out, once the customers were satisfied with an alternative, they abandoned the company virtually overnight. Because their costs were too high, it was difficult for management to respond by lowering prices.

Another example might include rising inventory. Those of you in the steel industry recently experienced the rapid rise in steel costs. Many of you fell into two camps: those who could/would pass on the steel price increases and those who couldn't/wouldn't. However, it seemed like the bigger concern was whether or not you could get steel from your suppliers. The fear of not being able to supply the customers with what they wanted led many of you to overstock steel products, committing significant capital in inventory that subsequently started losing value as prices started to decline. Those of you who added surcharges to your estimates for steel price increases are being pressured to remove those surcharges. Unfortunately, some of you were making your only profit as a result of the surcharges. Your costs are too high and you've got too much of your capital tied up in inventory.

While these are two fairly clear examples, there are others less obvious. It's why it is so important to get an annual checkup that will demonstrate clearly where you are in relation to where you need to be based on current issues and challenges.

Ask yourself important questions. Some might include:

1. What is your competitive position? What are the factors that determine your success? Is your differentiation still valid or have you been commoditized?

2. What are the key strategic challenges affecting your sustainability? Have you created sustainable improvements?

3. How do your stated objectives address the issues found in questions 1 and 2?

4. How do you modify objectives and action plans if circumstances dictate it?

5. What are your customers saying? Are you building loyalty? How do you determine customer satisfaction?

6. Are you basing the organization's direction on fact or conjecture?

7. Is your performance measurement system current with business needs?

8. Do your work systems capitalize on the diverse ideas, cultures, and thinking of your employees?

10. Are you maximizing your value creation capability?

Asking the questions is the easy part. Answering them truthfully can be difficult. However, it might make the difference between success and failure.

Just as dental health needs to be monitored, so do businesses, markets and competitors. More than ever you need to know three things: Am I doing what I said I would do? Am I getting the results I hoped for? Can the results be sustained in the future?