Impact Assessment
Quantify the problem impact
What is Impact Assessment?
An Impact Assessment quantifies the effect of a problem across multiple dimensions — financial cost, operational disruption, customer or employee experience, and strategic risk. It helps teams prioritize which problems to tackle first by making the cost of inaction visible.
When to Use It
- •After writing the initial problem statement, to add quantitative weight
- •When leadership needs a business case to approve the improvement project
- •When multiple problems compete for team attention and you need a ranking
- •When the problem seems small but you suspect the cumulative impact is large
How to Use It: Step by Step
- 1
Identify impact categories
Common categories include: financial cost, time/labor, error rate, customer satisfaction, compliance risk, and employee morale.
- 2
Gather baseline data
Collect current metrics for each impact category. Use existing reports, system data, and time studies. If hard data is unavailable, use estimates with confidence levels.
- 3
Calculate annualized cost
Multiply per-incident costs by frequency. Express the total in terms leadership cares about: dollars, hours, or risk level.
- 4
Document indirect effects
Capture downstream impacts: rework, delayed deliverables, missed SLAs, staff turnover, and opportunity cost.
Example
IT help desk — Recurring Monday morning ticket spikes
Direct cost: 47 extra tickets every Monday, averaging 22 minutes each = 17 hours of analyst time per week. Indirect cost: Other tickets are delayed by 2 hours on Mondays, violating the 4-hour SLA for 12% of high-priority requests. Annualized: 884 hours of analyst time ($44,200 at blended rate) plus $18,000 in SLA penalty risk.
Pro Tips
- ✓Include both hard costs (dollars) and soft costs (morale, trust) — leadership responds to both
- ✓Use ranges rather than false precision: "$40K-$55K annually" is more credible than "$47,312"
- ✓Compare the cost of the problem to the estimated cost of solving it — the ratio builds the case
Facilitation Guide
Gather the team for a 60-minute session. Start with each person silently writing what they believe the problem is (5 min). Share and cluster similar statements (15 min). Draft a unified As-Is / Desired State / Gap statement together (20 min). Quantify the impact with available data (15 min). Close by confirming team agreement on the statement (5 min).
Other Tools in Step 1
Problem Statement
Define As-Is, Desired State, and Gap
List Reduction
Narrow a long list of candidate problems to a manageable shortlist through structured elimination
Weighted Voting
Prioritize options by distributing a fixed number of votes across candidates
Impact Metrics
Capture quantitative baseline metrics (financial cost, time wasted, defect rate, customer satisfaction) before improvement begins — enables ROI calculation in Step 6
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