In today’s fast-paced business environment, mastering strategy management is more critical than ever. It allows you to define your competitive edge, implement proper resource allocation, risk management, and performance measurement, and most importantly, drive innovation while building resilience for long-term success.
Committed to empowering organizations in that pursuit, The KPI Institute launched the State of Strategy Management Practice Report in 2022. The State of Strategy Management Practices Report is a detailed examination of current trends, challenges, and innovations within the realm of strategy management. This report synthesizes data from a wide range of sources, including surveys of industry leaders, interviews with experts, and an analysis of real-world case studies.
The report consists of three main sections: Strategy Planning, Strategy Measurement, and Strategy Execution. Each of these sections includes several areas of interest such as general practices, strategy review, key performance indicators (KPI) deployment practices, strategy execution challenges, and project management practices. It also offers recommendations for best practices to enhance strategy management and equip organizations to better navigate emerging trends and disruptions.
The State of Strategy Management Practice Report is an annual publication, and the continuity allows organizations to stay adaptable in a changing business environment. With this ongoing commitment, organizations are able to grasp the broader perspective and identify patterns and shifts, allowing them to adjust strategies and make continuous improvements.
In the State of Strategy Management Practice – 2023 Middle East Report, results in the Strategy Planning section show that most surveyed professionals see strategy formulation as consistent and structured, with 47% using specialized methodologies. In contrast, 38% reported no specific methodology, indicating a more flexible approach. It is also important to note that 15% acknowledged an informal process. Although an informal process may offer flexibility, it’s important to consider the potential drawbacks and challenges that arise from having a strategy without a strict framework.
Furthermore, in the Strategy Measurement section, 22% of respondents reported that their organizations lack a formal performance management system (PMS). The absence of a PMS creates several challenges, obstructing strategy execution and limiting the organization’s ability to adapt to change and capitalize on opportunities. This is further reflected in the Strategy Execution section, where professionals were asked about their organizations’ success in executing strategy; 57% acknowledged being aware of cases where the strategy had failed.
Given these red flags, it is crucial to recognize that strategy management practices must evolve to meet organizational needs and adapt to the external environment. To determine whether the figures above have improved and if organizations have enhanced their strategy management, The KPI Institute conducted another research this year, diving more into the Middle East and North Africa (MENA) region. The findings will be presented in the third edition of the State of Strategy Management Practices Report.
The State of Strategy Management Practices Report – 2024 MENA Region will be available soon. This report presents statistics from over 100 organizations and features insights from leaders of top companies. This edition has been more refined as it offers advice from The KPI Institute’s own experts on developing more effective organizational systems for strategy planning and execution.
Stay tuned for the official release date and details on obtaining your copy. For updates and exclusive content, sign up for our newsletter and follow us on LinkedIn.
Imagine a manufacturing plant aiming to maintain operational excellence while facing potential safety hazards every day. In such a scenario, tracking key performance indicators (KPIs) such as production efficiency and output is needed for assessing performance. However, without considering key risk indicators (KRIs) like workplace incidents or equipment failure rates, the plant may overlook critical safety concerns until they become costly disruptions or accidents.
Integrating KPIs and KRIs enables the plant to proactively manage both performance and risk and ensure smooth operations while prioritizing employee safety. Overall, this integration is essential for promoting ongoing improvement and awareness of risks within the organization.
The KPI Institute defines KPI as a measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity. KRI is a measure used to evaluate the likelihood of an event’s probability and consequences that could exceed the organization’s risk appetite and significantly harm the success of the organization.
While most organizations rely heavily on KPIs, rooted in historical data, these may offer limited insight into future threats. KRIs modify the narrative by beginning with a proactive framework for risk management and developing measurements around prospective pitfalls in the future.
Improving risk management
Utilizing both KPIs and KRIs would provide a more systematic approach to risk management compared to relying solely on KPIs. For instance, within the supply chain context, KRIs may cover aspects, such as supplier performance, reporting accuracy, and emerging industry trends. This gives the organization a clear picture of all possible hazards and enables it to foresee and handle issues before they have an adverse effect on operations. Here are the overarching benefits of using KRIs in risk management:
Proactive identification: With KRIs, organizations can proactively detect potential risks before they occur. For example, by monitoring supplier performance to anticipate supply chain disruptions or analyzing industry trends to predict market shifts, organizations can minimize possible harm. This proactive approach enables early intervention and allows the organization to implement preventive measures.
Root cause analysis: KRIs encourage delving deeper than immediate events to identify the underlying root causes behind potential risks. For example, rather than simply reacting to a decrease in supplier performance, KRIs can signal organizations to uncover the reasons behind it, whether due to internal issues, external market forces, or other factors. By addressing root causes, organizations can develop more effective risk management strategies and prevent similar issues from recurring in the future.
Decisions based on data: Integrating risk assessment into current data streams allows organizations to make informed decisions in real-time. By leveraging KRIs and building alerts or other KRI-based solutions, organizations can access timely and pertinent information to guide decision-making processes. For instance, by monitoring relevant data points, such as financial indicators, organizations can quickly identify emerging risks and take appropriate actions to manage them. This allows organizations to be resilient and agile in the face of uncertainty.
Implementing KRIs
Organizations must understand the relationship between risk and performance to improve cross-functional collaboration and incorporate risk concerns into business decisions. For the integration to be successful, KRIs should be reported and communicated effectively. To create KRIs and corresponding mitigation plans, the individual who oversees the Enterprise Risk Management (ERM) process should work with the risk owners. The “risk owners,” who can effectively oversee their business units in line with their individual units’ risk goals, are the main benefactors of KRIs.
Risk owners must evaluate KRI data pertaining to risks that impact their units on a frequent basis. It is important to acknowledge that the different methods for reviewing KRI data also depend on an organization’s functions. In addition, successful identification and implementation of KRIs also requires a structured approach with the following key steps: identifying key metrics, assessing gaps, improving metrics, validating and setting trigger levels, and establishing a risk control plan.
Harnessing the power of KRIs alongside KPIs emphasizes the link between successful risk management and successful organization outcomes. This encourages a proactive attitude to risk, in which mitigating risk is viewed as an investment in accomplishing corporate objectives rather than as a cost.
Nawaf Al Omari boasts over a decade of experience in optimizing teams and driving project management success. He excels at forecasting staffing needs, resource management, and fostering collaborations, with a 40% increase in stakeholder satisfaction. Prioritizing data-driven decision-making, he is adept at mitigating risks, tracking KPIs, and achieving cost reductions. Nawaf is strongly committed to delivering results and operational excellence.
The popularity of sustainability has surged in recent years, causing organizations to grapple with balancing short-term profits with long-term sustainable practices. This has led to concepts like shared value and corporate social responsibility, with companies aiming to create economic and social value while reducing their environmental impact. The movement has sparked active efforts, with social innovators, policymakers, investors, and academics all striving to measure sustainability.
In today’s world, companies must move beyond outdated economic metrics and adopt KPIs that consider the triple bottom line, including social, economic, and environmental aspects of their operations, all while promoting sustainable human well-being.
However, sustainability is a constantly evolving concept that adapts to context and cannot be measured with a single yardstick. The balance between social, economic, and environmental considerations is crucial to achieving sustainability. It is like walking on a tightrope, requiring constant adjustments to maintain equilibrium in a changing world. Each context requires a unique approach, with varying weights and measures for different factors. Customized solutions are needed that address stakeholder needs while maintaining long-term balance, as a one-size-fits-all formula won’t work.
About the Expert
• As a Managing Director, Teodora leads development initiatives to support and enhance the organization’s strategic plan and manages the development and growth of the MENA branch of The KPI Institute.
• An expert researcher, consultant and practitioner with six years of experience in the deployment and implementation of KPI Management Frameworks.
• Pursuing a PhD. in Management on the topic: Rethinking the Performance Management Systems to ensure organizational sustainability, Lucian Blaga University, Romania
• Postgraduate Program in Entrepreneurship and Venture Creation, ISCTE Business School Lisbon, Portugal
• Master’s Degree in Project Management, Romanian-German University, Romania
The global economy felt the effects of the COVID-19 outbreak, and the IT sector was no exception. Because of the economic slump, various IT companies have announced layoffs. Since the beginning of 2023, the IT industry layoffs wave topped the media with a 649% spike in cases reported last year. When workforce reductions take place, the strength of an organization’s employer brand may suffer significantly.
Taking the layoffs at Twitter as an example, only 2% of the remaining employees suggest the company as a good place to work, and 1% believe that the company treated the affected employees with dignity. Understanding the consequences of layoffs on a company’s reputation will enable management to analyze perception trends and develop long-term solutions. One approach is to use key performance indicators (KPIs) such as # Employee Net Promoter Score (eNPS) or # Employment brand strength.
Employment brand strength
# Employment brand strength is an important KPI for any organization that wants to recruit and retain top talent and foster an engaging workplace while maintaining business viability. Employment brand strength is a metric that measures how prospective and current employees view a company.
Tracking # Employment brand strength can help companies monitor their progress over time and identify areas of improvement in different aspects such as brand awareness, work-life balance, career development opportunities, and social responsibility. This will result in a more positive work environment, the attraction of more top talent, and the achievement of their business objectives.
eNPS
Employee net promoter score is a KPI that companies use to measure employee loyalty and satisfaction. Similarly to the NPS for consumers, eNPS applies the same principle to workers, measuring how likely they are to recommend their company as a place to work. Because it is straightforward and easy to track. It can also assist businesses in assessing their employee experience and evaluating their objectives. eNPS can also be used to compare the performance of a company to that of its competitors.
Figure 1. eNPS | Source: Questpro
eNPS is a valuable KPI that can assist firms in measuring and improving employee happiness and loyalty, leading to increased productivity, fewer attrition, and improved business results.
How to measure it
Employee surveys can be utilized to assess employee satisfaction, engagement, and retention. eNPS is the most dependable and widely used employee survey method. It simply asks, “On a scale from 0 to 10, how likely are you to recommend your workplace?” Negative aggregate eNPS scores (Promoters – Detractors) are a major warning sign.
Candidate surveys can be used to identify areas in which the employer brand appeals to potential candidates.
Social media monitoring can be used to observe online conversations.
Communication is the key
According to Forbes, the company should exhibit compassion for the process. Employees will have numerous questions, and managers must address their concerns, so it is important to implement an open-door policy. Providing job search assistance may also help companies reduce the likelihood of negative comments. Companies should also monitor and anticipate such remarks on social media platforms like Glassdoor and prepare diplomatic responses.
However, it is preferable to forestall it from the beginning.
After Nokia’s 2008 earnings rose 67%, the CEO let off 2,000 or more employees to save expenses, which harmed the employer brand and triggered demonstrations.Three years later, in 2011, Nokia had to go through another layoff wave, but at this point they reformed and included the impacted staff to guarantee a seamless transition and avoid negative feedback.
By handling layoffs with transparency, fairness, and compassion, focusing on employee retention and engagement, and tracking the reputation of the employer brand properly, companies can mitigate the damage and maintain a positive work environment amid the tech industry crisis.
Editor’s Note: This article is originally published in the 22nd PERFORMANCE Magazine – Printed Edition. To get your own copy of the whole magazine, visit – TKI Marketplace – to download the digital copy and – Amazon – for an additional printed copy.
Key performance indicators (KPIs) are essential in assessing the performance of smart cities, which are emerging as the main drivers of economic development in several countries today. The Organization for Economic Co-operation and Development (OECD) defines smart cities as “cities that leverage digitalization and engage stakeholders to improve people’s well-being and build more inclusive, sustainable and resilient societies.”
According to the paper “Smart Cities Evaluation – A Survey of Performance and Sustainability Indicators,” more than 60% of the worldwide population lives in urban areas. However, the negative impact of urbanization on the environment is increasing. The United Nations’ Sustainable Development Goals (SDGs) encourage the increased use of technology to provide efficient services, high quality of life, and alternatives for strengthening environmental sustainability.
Analyzing smart city performance enables policymakers at both the national and local levels to set achievable targets, determine where cities stand on their goals, track progress, and adjust policies. The Institute for Management Development (IMD) in Lausanne, Switzerland, and the Singapore University of Technology and Design (SUTD) cooperate to generate the Smart City Index (SCI). The study rates 118 cities from all over the globe based on inhabitants’ judgments of how technology may enhance their lives, as well as economic and social data from the UN Human Development Index. In July 2021, the report polled 120 residents in each city, totaling roughly 15,000 people.
The first three top-rated cities by IMD according to the SCI 2021 are Singapore, Zurich, and Oslo. The main aspects analyzed through SCI 2021 include priority areas that are perceived by the citizens as priorities to be improved. The second importance is based on Structures and Technologies, which are key survey data collected and organized into five categories: health and safety, mobility, activities, opportunities, and governance. Each indicator under these categories displays the score for the city and a comparison with the top four.
There are five characteristics that are desirable to users based on a quality model for a smart city designed in the paper “Metrics and indicators to evaluate the degree of transformation to smart city of a city. An ad-hoc quality model:” business and energy, transport and traffic, public security, inclusion and security, education, and innovation and development.
All these areas could be optimized through a specially developed set of metrics that can be adapted accordingly to the specific region/country. Some examples refer to: # Wi-Fi antennas, % Solar panels, # Intelligent interrelated systems, #State drones or # Intelligent garbage containers.
The Holistic Key Performance Indicators (H-KPI) Framework was developed by the National Institute of Standards and Technology (NIST) to assist municipal managers and other stakeholders engaged in governance and social development that analyze the benefits of smart city technologies. It was created to serve as a foundation for the development of measuring methods that allow for integration, adaptation, and extension across three interconnected levels of analysis: technologies, infrastructure services, and community benefits.
Strategic planning, system design and assurance, and operations management are all applications of the H-KPI technique. According to Smart Cities Connect, five metrics are used in the H-KPI Framework: across districts and neighborhoods, KPIs are aligned with community priorities; assets that are in line with the needs of the community; effectiveness of investment; density of information flow; and infrastructure service quality and social programs. This involves a baseline assessment, a comparative study of technology options, system design, and project sequencing for strategic planning.
The U.S. Department of Commerce’ National Institute of Standards and Technology (NIST) elaborated on the data collection in the H-KPI method in a special publication. The NIST paper shows that the data collection goes through five phases: data source selection (define city data sources); data gathering (turning raw data into information); modeling (develop data sharing models for city data); characterization (listing smart city data and goals); and quantification (comprehensive analysis based of previous steps.
In conclusion, performance metrics play a key role in assessing the ability of cities and communities to deploy sophisticated technology efficiently and effectively as well as the reliability and efficacy of systems and strategies used in developing and running smart cities.
To level up your knowledge and understanding of performance metrics, The KPI Institute is continuously delivering quality content through online and face-to-face classes on Certified KPI Professional and Practitioner. Through this program’s intensive and organized approach to measuring performance, you will be provided with the required knowledge and training to advance your skills among other professionals. Visit The KPI Institute’s website for further information.
