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.
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.
In the world of strategic planning, the guiding light of SWOT analysis looms overhead, illuminating the path of organizations as they strive toward success. SWOT is an abbreviation of Strengths, Weaknesses, Opportunities, and Threats; it is an effective framework that empowers businesses to navigate the complexities of decision-making. It offers a structured lens through which organizations can examine their internal resilience, vulnerabilities, external openings, and looming challenges. This comprehensive analysis serves as the cornerstone for strategic planning, innovative thinking, resource allocation, and adaptive strategies.
At its heart, SWOT analysis is a well-organized exploration of what an organization does well and where it could improve (those are the internal bits), as well as the changes and challenges it faces from the outside world (that’s the external stuff). Think of it as seeing the bigger picture of where an organization is right now and where it might be headed in the future. It is more than just a tool; it’s a trusty compass that helps steer the ship through the twists and turns of business strategy.
The key components of SWOT analysis
A SWOT analysis can be broken down into four key parts, each offering a unique perspective on the organization:
Strengths are the internal factors where the organization shines and stands out from its competitors. They could be things like having a strong brand, a loyal customer base, solid financials, cutting-edge technology, or highly skilled employees.
Weaknesses point to areas where the organization needs to improve to stay competitive. These might include having a weaker brand, high employee turnover, too much debt, inefficient processes, or outdated technology.
Opportunities are external factors that could give the organization an edge. These opportunities can arise from changes in market trends, shifts in demographics, evolving consumer preferences, or new regulations.
Threats are external factors that pose risks to the organization. These may include things like increased competition, rising material costs, economic downturns, shifts in consumer behaviour, or disruptions in the supply chain.
To present a SWOT analysis effectively, analysts often use a four-quadrant table, with each quadrant dedicated to one of the four components. Internal factors, strengths, and weaknesses are usually listed in the top row, while external factors, opportunities, and threats are placed in the bottom row. Strengths and opportunities, which are positive aspects, are positioned on the left side of the table, while weaknesses and threats, which are concerning elements, are placed on the right side.
How to conduct a SWOT analysis
A SWOT analysis is not merely an academic exercise—it’s a practical tool for strategic planning. Here’s a step-by-step guide to conducting a SWOT analysis effectively:
Identify your purpose
It’s crucial to have a clear focus, whether it’s evaluating a new product rollout, assessing a division’s performance, or guiding overall business strategy. Your objective will serve as a guiding star throughout the process.
Collect required resources
Identify the resources and data you’ll need to conduct a thorough analysis. This includes both internal data, such as financial reports and employee feedback, and external data, like market research and industry trends.
Compose insights
With your team in place, initiate a brainstorming session for each of the four SWOT components. Encourage participants to contribute ideas and insights, even if they seem unconventional. Internal factors should be explored for strengths and weaknesses, while external factors should be assessed for opportunities and threats.
Filter outcomes
After the brainstorming session, you will likely have many ideas within each category. The next step is to filter and prioritize these findings. Engage in discussions and debates to determine the most critical strengths, weaknesses, opportunities, and threats facing the organization.
Develop the strategy
Armed with a prioritized list of SWOT elements, it’s time to convert the analysis into a strategic plan. Your analysis team will produce the findings and provide guidance on the original objective. For example, if the analysis was conducted to assess cybersecurity issues like outdated systems, the strategic plan may recommend investing in better tech and checking security regularly or partnering with cybersecurity experts for assistance.
Real-world SWOT analysis examples
To show how useful SWOT analysis is in real life, let’s look at two real-world examples:
Tesla, Inc. effectively employs SWOT analysis in navigating the electric vehicle (EV) sector. Their strengths encompass innovative technology, a robust brand, and global reach, and their challenges include production issues and elevated costs. They find opportunities in the promising EV market and expansion into the energy sector while facing threats from intense competition and evolving regulations. Tesla’s strategic approach, influenced by this analysis, emphasizes innovation, global expansion, diversification into energy solutions, managing competition, and compliance with regulations.
Amazon, the global e-commerce giant, exemplifies how SWOT analysis shapes strategic choices. Its strengths encompass e-commerce dominance and a culture of innovation. Challenges include slim profit margins and counterfeit products. Opportunities are found in expanding markets and global reach, while threats come from intense competition and evolving regulations. Amazon’s strategy revolves around customer-centric innovation, diversification, global expansion, marketplace integrity, competition management, and regulatory compliance. This SWOT-influenced approach ensures that Amazon maintains its leadership, fosters innovation, and adapts to changing market dynamics by leveraging strengths, addressing weaknesses, seizing opportunities, and mitigating threats.
Just like how we use different tools for different tasks, the SWOT analysis isn’t our only option. It’s more like a trusty friend that works alongside other friends in your planning adventure. Through SWOT analysis, you can make smarter decisions, be more creative, and adapt to changes in the world—as you would with good friends by your side.
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This article is written by Chadia Abou Ghazale, a seasoned banking professional with 24 years of experience and who excels in budgeting, sales performance management, data analysis, and resource planning. Beyond banking, she is a dedicated reader of self-development topics and passionate networker. Chadia believes that life’s purpose is the pursuit of knowledge. Her extensive expertise and unwavering enthusiasm are a dynamic combination, driving success in her career and enriching her life’s adventurous journey.
In today’s dynamic business landscape, the success of any organization hinges on its ability to execute its strategies effectively. A well-crafted strategy can set the direction for growth and innovation, but its potential is realized only when it is translated into action through meticulous execution. Central to this process is the role of employees, who are the driving force behind turning strategic visions into tangible results.
Employee performance is a pivotal factor in the success of any organization. To achieve excellence, companies must focus on setting clear strategies and executing them effectively. This article will delve into best practices for driving employee performance, emphasizing strategy execution.
Strategic alignment: Effective strategy execution begins with aligning individual roles and responsibilities with the overarching organizational strategy. By clearly communicating the company’s goals and vision, employees gain a deeper understanding of how their contributions directly impact the larger picture. This alignment fosters a sense of purpose and promotes a collective commitment to achieving shared objectives.
Clear communication and cascading goals: A well-executed strategy demands clear communication across all levels of the organization. Leaders play a vital role in disseminating the strategic direction, ensuring that every team member knows their role in the grand scheme. The practice of cascading goals from top to bottom ensures that each employee’s performance objectives are in harmony with the organization’s strategic imperatives. It is important to regularly communicate the big picture to emphasize the importance of individual contributions.
Metrics and performance tracking: Measuring employee performance is essential for gauging strategy execution effectiveness. Implementing performance metrics and key performance indicators (KPIs) provides a quantifiable way to assess progress. Regular reviews allow adjustments to be made, ensuring the strategy remains on course. Visual tools, such as charts and tables, can help visualize performance trends and identify areas for improvement. Setting SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) goals and KPIs that align with the overarching strategy provides employees with tangible targets and fosters a sense of accomplishment.
Empowerment and autonomy: Empowered employees are more likely to take ownership of their tasks and proactively seek ways to contribute to the strategy’s success. Providing employees the autonomy to make decisions within their roles fosters a sense of accountability and commitment. This empowerment not only boosts individual performance but also promotes innovation and adaptability.
Recognition and rewards: Acknowledging and celebrating accomplishments, both big and small, go a long way in motivating employees. Recognition reinforces the connection between their efforts and the organization’s success. Tangible rewards, whether financial or non-monetary, serve as incentives that drive heightened performance.
Avoiding common pitfalls
While striving for optimal strategy execution, it is vital to steer clear of common pitfalls. One such pitfall is underestimating the importance of ongoing training and development. A skilled workforce is more capable of executing strategies successfully. Additionally, neglecting to monitor progress can lead to deviations from the intended path.
In the pursuit of organizational success, effective strategy execution is paramount, and employee performance should be inherently tied to it. Employees’ commitment, enthusiasm, and performance can determine whether a strategy remains an abstract concept or a tangible reality. Organizations can unlock the full potential of their strategic visions by aligning employees with the strategy, fostering open communication, recognizing achievements, and empowering them with tools to succeed. As leaders cultivate an environment where strategy execution is a collective endeavor, they pave the way for sustained growth, innovation, and achievement of long-term goals.
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This article is written by Rami Al Tawil, Organizational Excellence Director at Al Saedan Real Estate Company, who holds a master’s degree in industrial engineering from Jordan University of Science and Technology. With 19 years of expertise spanning Strategy Planning, Performance Management, Business Improvement, and more, he excels in aligning employees with strategic visions for consistent performance improvement.
Image source: pixelshots | | Getty Images via Canva
Measuring and managing performance is critical in identifying an organization’s performance levels. Although many companies measure their performance against their financials, this approach does not always succeed when facing crises like the COVID-19 pandemic. Performance management offers a deep understanding of procedures, processes, and services or products for higher management to view, which helps in making critical decisions when crises happen.
Therefore, organizations should establish, integrate, and adopt a dedicated performance management department. As discussed in the Certified Performance Management Professional course by The KPI Institute (TKI), a performance management system (PMS) helps align employees to meet corporate strategic objectives and career goals. In addition, it creates an environment where employees reach and exceed their abilities to produce efficient and effective products or services. This system, according to Aurel Brudan, founder and CEO of TKI, refers to “the overarching human activity that is concerned with achieving desired results, thus demonstrating and achieving performance. It reflects the approach one entity has towards performance, and it integrates both upstream and downstream with other domains of administrative science or managerial disciplines.”
Placement
The placement of a Performance Management Office (PMO) in the organizational structure depends on how the organization handles planning and execution. On one hand, if planning and execution are carried out by one department, then the PMO would be an independent department. On the other hand, if planning and execution are done separately in the organization, then the PMO would be under Corporate Strategy Planning and next to the Project Management and Strategic Planning offices. To sum it up, having a dedicated PMO is not enough. It is important to place the PMO in the organizational structure according to how planning and execution are performed within the organization to ensure clear and smooth integration within its hierarchy.
Measuring and managing performance is critical in identifying an organization’s performance levels. Although many companies measure their performance against their financials, this approach does not always succeed when facing crises like the COVID-19 pandemic. Performance management offers a deep understanding of procedures, processes, and services or products for higher management to view, which helps in making critical decisions when crises happen.
The following example is a subsection from a corporate-level organizational structure showing the placement of the PMO.
Source: The KPI Institute
Imagine a scenario where the Strategic Planning Department produces a strategy plan activated through projects executed and managed by the Project Management Department. The output of those two departments is then measured and managed by the PMO. The PMO in this structure ensures the smooth and effective execution of performance management activities. This setup is optimal due to its many benefits to operations and strategic alignment.
Benefits
There are several benefits to having a dedicated PMO. Performance management starts by connecting strategic objectives to key performance indicators (KPIs), deriving strategy implementation and supporting transformation to guide the organization toward improvement and growth.
The tangible benefits of having a PMO will typically emerge after its first year of implementation, with evidence likely showing up during the annual performance review. Analyzing the organization’s current state, defining its future, and managing performance throughout the year through performance management tools can give higher management a clear vision as they take critical actions to update their strategy as the situation demands it. Moreover, the PMO can identify and understand gaps and opportunities for improvement to ensure continued organizational growth and survival.
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This article is written by Engr. Hussien Abdullah Alkhalifah, a strategy and business planning professional who specializes in corporate performance, agile project management, business process improvement, performance management, KPI implementation, quality control, and strategic planning, among others. Connect with him on LinkedIn.
