The word “ecosystem” has been used more often in modern times, along with buzzwords such as corporate social responsibility (CSR) and sustainability. We use these concepts but currently, as a society, we still think that we stand apart from the ecosystem in which we live and create. We’re very reactive, that’s why concepts enter our mainstream vocabulary—but years later, we still don’t understand their relevance.
Today’s organizations are urged to rethink their strategies in response to disruptions in their business ecosystem, which are more significant than ever before. Our society faces a multitude of systemic issues that severely impact both the environment and the socio-economic fabric. However, the current ways of management and operations were built for a much slower era, when change was not constant, and risks were less pervasive and global.
The volatility of global markets, growing societal demands, and the scary way information expands every year force business leaders to innovate not just in technology, but in purpose. Understanding the status quo within the business ecosystem allows us to determine weaknesses and gaps, explore our potential as a society, and find solutions tailored to current needs.
Our Current Business Ecosystem
Resource Depletion
Our current business models based on overexploitation lead to scarcity, increased costs, and long-term supply chain vulnerabilities. For instance, the fishing industry has faced challenges due to overfishing, which depletes fish stocks faster than they can regenerate, threatening marine ecosystems and the fishing industry itself. In the same way that the scarcity of human resources gave rise to the first industrial revolution, the current scarcity of natural resources will hopefully give rise to the next paradigm shift. This change is not merely about survival but about thriving in a future where the interconnectedness of global systems can no longer be ignored.
Invasive Practices
Business operations are characterized by a range of invasive practices that permeate everyday operations, impacting environments, societies, and individual well-being. For instance, excessive packaging in retail and takeaway services contributes to daily waste and environmental strain. The normalization of after-hours communication pressures employees to extend their workdays, blurring the boundaries between personal and professional life and impacting mental health and job satisfaction. Another environmental example of how unsustainable many of our industries is: It takes about 1800 gallons of water to produce a pair of jeans. Such practices often go unnoticed but cumulatively contribute to significant ecological damage and social injustices, undermining the quality of life and happiness of affected populations.
Our infrastructure is fundamentally designed to support market-driven and hierarchical systems, making it incredibly difficult to shift directions and unsuitable for modern demands. This setup deeply embeds short-term profitability and centralized decision-making into the fabric of our organizations and society. As a result, initiatives prioritizing sustainability and inclusivity face resistance, as they challenge established norms.
Polarization
Polarization, the deep division of opinions and beliefs, disrupts teamwork and collaboration in businesses. It creates an individualistic culture that makes it hard for employees to work together effectively and slows down progress on important tasks. Instead of working like a well-functioning ecosystem, businesses struggle to unite diverse talents and develop inclusive strategies for success.
Unpredictable Disruptions
Unexpected disruptions worsen challenges, adding to the fragility of our societal landscape and jeopardizing sustainability. Events like natural disasters or conflicts can disrupt supply chains and markets, exacerbating resource scarcity. These occurrences underscore the vulnerability of our systems and emphasize the need for proactive and flexible measures.
Isolation and Competition
Competing in isolation refers to a company’s strategy of acting independently without engaging in significant cooperation or information-sharing with other entities, such as partners, competitors, or even internal stakeholders. It is a strategy focused on self-reliance and keeping strategic information and practices secret with the intention of gaining a competitive advantage by limiting external involvements and partnerships that could potentially expose business vulnerabilities or strategic intentions. This sometimes leads to myopic observations of the broader market dynamics and reduction of business agility to new challenges or even the harnessing of collective strengths within the company’s industry or ecosystem.
Streaming platforms like Netflix and HBO Max have faced challenges due to their secretive practices regarding viewership data. These companies choose not to disclose detailed statistics about how many people watch specific shows or movies, aiming to protect their competitive edge and prevent rivals from identifying their strengths and weaknesses. However, this secrecy can lead to issues such as distrust between content creators and the platforms and also affects advertisers and industry partners who rely on accurate data to make informed decisions.
We don’t have the luxury of continuing to operate this way. The age of short-termism has to end. It’s not unprecedented for the business landscape to radically adapt to global challenges: we have already transitioned from commanding hierarchy to incentives, from top-down management to collaboration. That transition to see businesses as part of a larger ecosystem (even larger than the “business ecosystem”) is imperative not only because of increasing resource scarcity but also because of increased demand from consumers, employees, and governments for sustainable and ethical business practices. This also means that businesses need to adapt not just due to CSR—although that should be reason enough—but in order to enhance creativity, innovation, and resilience, and make themselves viable long term.
Stay tuned for Part 2 of this article to explore how ecosystem thinking can be implemented to strategically enhance your organization.
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About the Author
Bori Péntek is a management consultant specializing in organizational development and human resource management. She helps businesses align their strategies, processes, and practices with their core values, focusing on human and social well-being. With experience in recruitment, HR, and operations management across sectors like sustainable construction, research, and instructional design, Bori emphasizes improving employee well-being, fostering inclusive cultures, and ensuring that organizations are resilient and socially responsible. She develops solutions that address systemic challenges and support long-term success.
Q: How can an organization create meaningful sustainability reports?
I will reply with a question: meaningful for who?
My point was to bring to your attention the importance of knowing your audience and the information they expect or need to receive. To identify what your sustainability report focuses on, one must identify the needs of the audience, and as you can assume, there will be one approach to report internally to the top management on the latest progress and a completely different perspective if the annual sustainability report must be released for external stakeholders. Moreover, there are compliance issues that must be considered since regulators, depending on your location, will require certain aspects to be captured in the reporting.
Putting aside the specific context of each organization and the local compliance issues, I find the following principles valuable for producing a quality sustainability report:
Identify the materiality issues – Identify what is the most relevant issue for your organization and consider the informational needs of the report’s users.
Ensure data accuracy – Misinterpretation of results or simple error calculation can lead to serious legal consequences, reputation damage, and loss of stakeholders or shareholders’ trust.
Focus on impact – Use specific KPIs or metrics to measure the achievements of objectives, avoid presenting only what the organization is doing, and include more data about the performance achieved and the impact created.
Provide regularity – Information should be reported on a predefined schedule (e.g., quarterly, annually).
Communicate with clarity – Use simple language, include essential information (not all data available), and use visuals that convey the data’s meaning effectively.
Center for Government Performance, The KPI Institute
Business Unit Manager of Research Programs at The KPI Institute.
Her professional experience embeds research skills with performance management consulting and practical strategy development and execution for the Research division.
In the last 10 years, Cristina contributed to the development of best practices and standards in how to use and leverage KPIs that are taught in the premium certifications of The KPI Institute worldwide and assisted large organizations in industries like oil and gas, financial sector, telecommunications, manufacturing, and utilities.
She conducts maturity assessments for performance management systems and has trained over 500 professionals over the last years getting first-hand experience with the most stringent issues organizations face.
This feature was first published in the Ask Our Experts section of Performance Magazine Issue No. 25, 2023—Sustainability Edition. It offers deep dives and practical insights into the sustainability strategy and performance management. To download the free digital copy, visit the TKI Marketplace. You can also purchase an additional printed copy via Amazon.
The field of data analytics is very important nowadays, considering how the business environment is going through continuous developments in terms of technology, innovation, globalization and sustainability. The field also faces various economic struggles and unexpected challenges. For these reasons, managers and executives must remain up-to-date with information and data to make the best decisions for their organizations and maintain their competitive advantage in the market by creating value for clients.
To do so, I recommend managers and executives join different professional groups on LinkedIn where they can ask questions and discuss any challenges they are facing. They should also have subscriptions to various research journals and business magazines. It also helps to attend conferences where they can meet researchers and professionals from both the academic and business worlds.
Furthermore, following business blogs, watching podcasts, and reading books are valuable methods to gather new data to make informed decisions. By being part of professional groups on social media and attending conferences, managers and executives can find out in real-time the challenges other leaders face, discuss them, and take on new ideas for implementation as early as the next day. These communities of managers and executives are valuable assets in today’s challenging business environment.
Over the recent years since Vision 2030 of the Kingdom of Saudi Arabia (KSA) has been initiated, the massive changes within the operations of government entities have led to a rise of expectations for better communications with the stakeholders to achieve effective citizen engagement. Communication strategies and initiatives have been developed and launched with the initiation of KSA’s Vision 2030 in order to streamline the strategic objectives and clarify the roles of stakeholders and staff as well as identify the target audience and communicate with them more effectively.
To implement the communication strategy of any public entity effectively and efficiently, the communication plans should include what information should be communicated, who should receive that information, when that information should be delivered, and how those communications are tracked. Also, some actions need to be considered within the implementation of communication strategy, such as opening two-way communication means, using technology to streamline the communications, and focusing more on engaging with the audience–not just listening to them and answering.
No matter where an organization stands on its journey, ensuring that its performance management practices are up to par can influence its progress. Done correctly, this could be the edge that sets it apart from the competition.
The KPI Institute (TKI), through the efforts of the dedicated members of The Global Performance Audit (GPA) Unit, has successfully collaborated with the Talent and Performance Management Department of the Tourism Development Fund (TDF) to evaluate the performance management practices of the organization. This evaluation encompasses various areas, such as strategic planning, corporate performance management, employee performance management, and organizational culture.
The TDF is a young organization established in Saudi Arabia in 2020 with the mandate of driving growth in the national tourism sector by enabling private investments. With nearly 200 employees, the TDF has set up a formal division dedicated to managing strategy and performance. It comes with specialized departments responsible for handling key processes like strategic planning, corporate performance management, strategic initiatives portfolio, organizational excellence, research, and insights. Similarly, people’s performance and organizational culture are guided by specialized teams.
The KPI Institute’s maturity assessment for the division adhered to a holistic approach in both project coverage and methodology. In terms of coverage, the following organizational capabilities were evaluated: strategic planning, performance measurement, performance improvement, employee performance culture, and organizational culture.
Figure 1. Integrated Performance Management Maturity Model | Source: The KPI Institute
Regarding the methodology, TKI’s Integrated Performance Maturity Model includes a review of formal procedures and other official documentation (outputs) and insights from employees in the organization obtained through surveys and interviews with key internal stakeholders. All findings were rated against best practices using a scoring methodology, and the final score positioned the TDF on maturity level IV out of V (see Figure 2).
Figure 2. Performance Management Maturity Level | Source: The KPI Institute
To read the full article and know more about the stages of a performance management system maturity assessment, download the PERFORMANCE Magazine Issue No. 27, 2023 – Government Edition now through TKI Marketplace.
Unlock best practices that drive success in the government sector with insights from the Tourism Development Fund’s performance management practices evaluation. Get your hands on the physical copy of the magazine via Amazon.
