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Posts Tagged ‘Strategy’

Industry news: strategy and performance management updates in tourism

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Image source: Chris Leipelt | Unsplash

Strategy and performance management updates in tourism: Learn how the travel and hospitality industries have been navigating the post-pandemic era so far. 

IATA issues new report on safety performance

The International Air Transport Association’s (IATA) 2021 safety performance data for the commercial airline industry reveals significant progress in key categories compared to both 2020 and the previous five years. Findings show that the total number of accidents, all-accident rate, and deaths declined. Last year, there were no fatal accidents among IATA members or airlines on the IATA Operational Safety Audit (IOSA) registry (which covers all IATA members). For the first time in at least 15 years, there were no runway/taxiway excursion incidents.

“Safety is always our highest priority. The severe reduction in flight numbers last year compared with the five-year average magnified the impact of each accident when we calculate rates. Yet in the face of numerous operational challenges in 2021, the industry improved in several key safety metrics. At the same time, it is clear that we have much work ahead of us to bring all regions and types of operations up to global levels of safety performance,” said Willie Walsh, IATA’s Director General. | Source: IATA.org

Hyatt Hotels Corporation shares performance data on revenues, occupancy

Hyatt Hotels Corporation said that its comparable system-wide RevPAR in May was around $127, the highest RevPAR performance in any single month since November 2019. RevPAR, a commonly used performance measure in our industry, refers to the product of the average daily rate and the average daily occupancy percentage. System-wide RevPAR in May was around 6% lower than in May of 2019(1), or approximately 3% higher when Asia Pacific was excluded. Comparable system-wide RevPAR increased by 2% in May compared to April, owing to higher occupancy, mainly in urban areas. In addition, the average daily rate in May was nearly 8% higher than in May of last year, driven by luxury brands in the Americas, which outperformed 2019 by approximately 24%. | Source: businesswire.com

GE’s Airspace Insight adds new feature for operational performance monitoring

GE Digital announced the addition of the new Network View Module to its Airspace Insight™ software. This will give airlines insights where within their network they need to focus to enhance operational performance based on a range of efficiency and safety metrics developed to identify patterns in airspace waste and minimize fuel consumption. Moreover, the module can aid in tracking and measuring the results of initiatives to enhance airspace efficiency and safety, as well as benchmarking progress against other airlines or collaborating with other airlines, regulators, and Air Navigation Service Providers (ANSPs) to promote industry efficiency and safety. 

“Reduced reliance on anecdotal evidence for understanding operational issues, benchmarking, and knowledge sharing between other airlines are what airlines are looking for. They want to know which airlines are flying into this airport, and how efficiently and safely they are doing so. Which markets are underserved or not served at all? Airspace Insight’s Network View Module can help answer these questions,” said Andrew Coleman, General Manager of GE Digital’s Aviation Software business. Source: marketscreener.com

HSMAI survey reveals woes in retaining talent in hospitality

The Hospitality Sales and Marketing Association International (HSMAI) has launched the report “The State of Hotel Sales, Marketing, and Revenue Optimization Talent 2020-2021.” Results found that employers in the industry are facing issues in the areas of compensation and benefits, scarcity of competent candidates, pipeline concerns, and poaching loyalty and company culture. Meanwhile, the trends detected by the report emphasize the value of corporate culture, servant leadership, mental health and wellness, and reskilling and upskilling. The insights are from “50 brand and hotel management company revenue executives and ownership group commercial executives across disciplines to rate the challenges facing commercial talent in hospitality.” Source: hsmai.org

US announces new National Travel and Tourism Strategy

To promote the US travel and tourism industry, US Commerce Secretary Gina M. Raimondo introduced a new National Travel and Tourism Strategy. It is designed to achieve a five-year target of attraching 90 million foreign tourists to the country annually. The arrival of tourists is expected to generate $279 billion each year, strengthening employment growth in communities around the United States, its territories, and the District of Columbia. The strategy involves positioning the US as a major travel destination to encourage visitation to underprivileged and underrepresented groups; ensuring safe and efficient travel to and within the US and its territories; supporting diverse tourist experiences, particularly on federal lands and waterways while also safeguarding them; and establishing sustainable travel and tourism. Source: https://ftnnews.com/

Editor’s Note: This article originally appeared in the 23rd edition of Performance Magazine Printed Edition.

How To Know Your Strategy Is a Winner

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Often than not, several executives take strategy as a routine task or a series of frameworks instead of a mode of visualizing and solving problems. Furthermore, taking on the newest strategy trends or following a successful entrepreneur’s guidelines is not an ideal way to win. Companies need to take their strategies through a series of tests to determine their validity.

There are three tests that identify the success of strategies. These assessments help executive teams to answer some of their burning question, such as: 

          a) Does your company strategy respond to uncertainty and trends? 

          b) Does your strategy exploit legitimate sources of advantage?

          c) Is your strategy aligned and cascaded throughout your organization? 

Three Winning Strategy Tests 

There are three types of tests companies can apply to determine whether their strategies are viable or not. The first one is the Fit Test. This type of test measures the level of fitness of a company’s strategy along with its business condition. When conducting the Fit Test, there are three fit dimensions that need to be assessed: internal fit, external fit, and dynamic fit. 

Internal fit and external fit are the keys to securing a company’s survival (Tyge Payne et al., 2015). Internal fit is described as a multi-dimensional matching of strategy with structure. It is undertaken to ensure that the strategy matches the company’s resources as well as competitive capabilities. Winning strategies display an internal fit and must be compatible with the ability of a company to implement the strategy in a competent mode. 

External fit refers to the congruence between an entity’s strategy and composition and its task environment. Testing external fit will exhibit how a strategy matches significantly with the external conditions, such as industry dynamics, competition, and market opportunities. Therefore, a strategy will only work well if it has an excellent external fit against the external environment. 

The last type of fit test is dynamic fit. It is a fundamental measurement that assesses if strategies are changing over time. Dynamic fit is used to synchronize and align the current state of the business with market conditions. 

According to Jonathan Trevor and Barry Varcoe, retaining a good strategic alignment relies on the ability of a company’s structure, procedures, and culture to evolve with strategy changes. The signs of misalignments are always evident to employees and customers who fail to receive the type of service they expect. 

The second type of test is called the Competitive Advantage Test. This type of test measures the lasting competitive advantages of businesses in the market space. The Competitive Advantage Test also enlightens managers on strategies that often fail to keep up a constant competitive advantage with rivals. Failed approaches to maintain a competitive advantage over competitors usually lead to inferior performance in the long run. 

As winning strategies enable competitive advantage to be durable and larger, the research of competitive advantages in the tech industry by (Huang et al., 2015) sheds light on the outcome differences between Temporary Competitive Advantage (TCA) and Sustainable Competitive Advantage (SCA). 

The paper suggests that companies can achieve higher outcomes through SCA by amassing assets, resources, and capabilities. However, TCA created through strengthening market positions can assist firms with capital to accumulate resources that will develop a sustainable competitive advantage.

The Performance Test is the third form of measurement to differentiate a winning or losing strategy. A performance test is vital for organizations as companies usually mark their success based on performance. There are two types of indicators that a company looks at to understand the standard of this strategy test: 

          a) Competitive strength and market positioning and

          b) Profitability and financial strength. 

One of the performance measurements tools that businesses can use to effectively manage organizational performance is the balanced scorecard. It provides a holistic strategy implementation framework comprising five elements: desired state of evolution, strategy map, performance scorecard, performance dashboard, and portfolio of initiatives.

To sum it up, a company’s strategy needs to excel in all tests to succeed. Failing in even one of the tests could spell problems for business ventures and lead to negative performance. A company can introduce new practices only if they match or erase both internal and external conditions. On the other side, existing strategies should always be evaluated thoroughly to affirm that they are fit and contribute to good performances and competitive advantage. Incorporate fast changes to current strategies if companies fail at least one of the three tests. 

Take a look at The KPI Institute’s website and find out more about the Certified Balanced Scorecard Management System Professional course. Discover new approaches on how to create a performance management system based on the balanced scorecard technique and how to implement it at all levels of the organization. 

Stakeholder Management: Nokia Siemens Network as a Partner

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Image Source: handelsblatt

Telenor Group is a telecommunication provider in 14 countries across Europe and Asia. They depend on reliable, cost-effective operational expenses and faith in delivering results when they choose their partners.

Aamir Ibrahim, the chief strategy officer, vice president cooperative fairs in Telenor Pakistan, explained their main principles in choosing their partners in the Pakistani market.

He believes that customer experience is very important to stay in the market. He said that customer experience is controlled mainly with network availability, which should show strong and continuous coverage all the time.

However, such availability brings more costs to the company in terms of power consumption and power infrastructure availability. This led them to look for other solutions to reduce operational expenses while providing the best services for their customers.

Atiq Ahmad, the chief technical officer, noted that finding a partner who can provide the right solutions for their problems while keeping the expenses within the budget has been one of the company’s main concerns.

All of these factors fit Nokia Siemens Network, showing Telenor-Pakistan that they can depend on them to provide robust products that can ensure the results they agreed on and consider the quality and reduction in operational expenses.

Nokia Siemens Network proved that they deserve to have a long-term partnership by providing efficient and cost-effective solutions for Telenor-Pakistan’s problems. These solutions are also within Nokia’s specialization.

Nokia Siemens Network accomplished this by doing continuous research on the telecommunication sector in terms of needs and the future developments that can be done to keep telecom providers competitive in the market. This way, they ensure the availability of solutions for problems that telecom providers face.

One of those problems is the end-to-end energy issues that telecom companies like Telenor-Pakistan face in terms of high operational expenses. Another is the environmental effects caused by the power networks that operate their sites. However, Nokia Siemens Network strived to provide different solutions to reduce operational expenses, provide trustful networks, and reduce environmental risks.

High experience in the market and good knowledge of customer needs and society’s expectations from a telecom provider are the factors why Nokia Siemens Network was chosen as the service partner for EMBARQ, a leading provider of broadband, entertainment, and voice services in the United States.

Jim Hansen, the senior manager of EMBARQ, said that to stay competitive, they should focus on what they are good at and find the right partner who can manage the sectors in which they are not specialized so they can get the best customer and meet employee satisfaction.

Tom Oothoudt, the manager of strategic planning and network operations focused on that Nokia Siemens Network, said that they are willing to improve their capabilities as well as their resources and solutions shared with EMBARQ to ensure reduction in operational expenses, customer satisfaction, and trusted solutions that will give advantages to the company in terms of results and high quality of services.

Maziad Al Harbi, the general manager of network services solutions at Saudi Telecom Company, a telecom provider in Saudi Arabia, said that the main reason for choosing Nokia Siemens Network to be their partner in delivering advanced services and the required platforms for their implementation is that they are experts in the Saudi market. Moreover, Nokia Siemens Network is said to have advanced knowledge of the market’s needs and what is required to satisfy the customers in addition to their worldwide experience.

He added that they are always active and doing their best to deliver the best solutions as the telecom company offers advanced services to the market faster than other competitors.

All of these reasons are accompanied by the teamwork that Nokia Siemens Network promotes. They believe that working closely with their partners strengthens the relationship, provides better solutions, and ensures a long-term relationship.

To learn more about developing strategies for your business and organization, read more about The KPI Institute’s Strategy and Business Planning Professional Certification.

References

  1. Normann, Richard and Rafael Ramirez, From Value Chain to Value Constellation: Designing Interactive Strategy, Harvard Business Review, 71 (1993) 65.
  2. Stephen L. Vargo and Robert F. Lusch, Evolving to a new dominant logic for marketing, Journal of Marketing, 68 (2004) 1.
  3. Robert F. Lusch, Stephen L. Vargo and Mathew O Berien, Competing through service: Insights from service-dominant logic, Journal of Retailing, 83 (2007) 5
  4. Chickery J. Kasouf, Jenny Darroch, Clase M. Hultman and Morgan P. Miles, Service dominant logic: Implications at the marketing/entrepreneurship interface, Journal of Research in Marketing and Entrepreneurship, 10 (2008) 57.
  5. Stephen L. Vargo and Robert F. Lusch, The service dominant logic mindset (2008), Available from:
  6. http://www.almaden.ibm.com/asr/summit/papers/arizonalusch.pdf.
  7. Franc Jacob and Wolfgang Ulaga, The transition from product to service in business markets: An agenda for academy inquiry, Industrial Marketing Management, 37 (2008) 247.
  8. Michael A. Hitt, M. Tina Dacin, Edward Levitas, Jean-Luc Arregle and Anca Borza, Partner selection in emerging and developing market contexts: Resource-based and organizational learning perspectives, Academy of Management Journal, 43 (2000) 449.
  9. Gulcin Buyukozkan, Orhan Feyzioglu and Erdal Nebol, Selection of the strategic alliance partner in logistics value chain, Int. J. Production Economics, 113 (2008) 148
  10. Szyliowicz, D., Dacin, M. T., and Ventresca, Political and institutional embeddedness: Alliance dynamics in the global exchange services industry. Working paper, Texas A&M University (1999).
  11. Stefan Wuyts, Peter C. Verhoef and Remco Prins, Partner selection in B2B information service markets, Intern J. Research in Marketing, 26 (2009) 4.
  12. Nokia Seimens Netowrk official website, Available from:
  13. http://www.nokiasiemensnetworks.com/.
  14. Telenor Pakistan official website, Available from: http://www.telenor.com.pk/

The Strategy of Memorable Gift Giving: How to Do Corporate Gifting Right

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Corporate gifting has become a $125 billion business in the US market alone. Corporate gifting is the practice of valuing and motivating employees through gifts, such as gift cards, branded items, edible treats, and non-physical favors like an eGift card or an experience. But what do employees generally think when they receive such gifts from the company they work for? 

The 2019-2020 Knack Business Gifting Strategy Report reveals that 77% of gift recipients feel more appreciated by the gesture. Sixty-seven percent believe that the giver values their relationship, and 59% think they did a great job. Forty percent report increased loyalty and a desire to work with the company longer.

However, the feeling of connectedness to the company increases by 50% if the gift received is “memorable.” So, what are the business gifting expectation gaps, and what does the strategy for memorable gift-giving look like?

The Business Gifting Expectation Gap

According to the 2019-2020 Knack Business Gifting Strategy Report, the most important factor that drives employee opinions as far as the corporate gifts they receive are concerned is the thought that went into the gift. Employees believe that it is important that the gifts received are selected for them, especially that the gift includes a personal message and has the employee’s name or initials on it. 

As for the satisfaction levels with the gift received, the most satisfied employees seemingly receive gift cards. The most dissatisfied employees are those who received company-branded items, significantly less, for that matter, than employees who received gifts of any other nature. Employees also agree that company-branded items are the least memorable gift a company can offer its employees.

The Strategy of Memorable Gift Giving

To make the best impact with its gifting initiative, any company should apparently focus on the uniqueness of its gifts, gifts with distinctive value attributes, and items that give back in some way. Another important factor to consider is that aside from gift cards, employees can only estimate the value of a corporate gift. That is why it is important that companies focus more on quality rather than quantity while making the most out of the manner in which the gift is presented to the employee in question.

The quality of the gift unwrapping experience can positively add to the value of the items within. The 2019-2020 Knack Business Gifting Strategy Report reveals that in most circumstances, employees do not expect to receive gifts that cost more than $150, while the average spending amount per gift revolves between $50 and $150.

How to Do Corporate Gifting Right

Planning and developing an effective corporate giving strategy turns out to be a little more complex than one thinks. The following best practices can be applied in terms of making the corporate gifting initiative easier for the HR and administrative staff while also creating a memorable experience for company employees:

  1. Establish a gifting initiative plan and budget: Outline the objectives of the initiative and set specific parameters for completion. For example, consider shipping fees for remote employees and packaging options for on-location recipients.
  2. Consider corporate etiquette for the gifting strategy: When giving personalized gifts, companies must ensure that gifts are maintained within the same monetary value and abide by the corporate guidelines.
  3. Practice outstanding personalization: Put the necessary time and effort in to make employees feel like the gifts were specially selected for each of them. While satisfaction with any gift may be part of the equation, memorability drives the loyalty and connectedness that create the ROI.

Corporate Gifting Trends in 2021

Gift cards are the gifting solution that always fits. They continue to be the safest and the most universally satisfying option for corporate gifts in 2021. Gift cards can be easily personalized while giving employees exactly what they want. E-gift cards seem to be the latest trend in card gifting in the corporate world, and millennials especially prefer them.

The corporate gifting business is booming. Gifting to employees is expected to grow even more in 2022, fueled by C-Suite Executives, 40% of whom plan to budget more for gift-giving strategies in the following year.

The desire to incorporate unique brand values into corporate gifts has reached its climax. Memorable gifting experiences humanize businesses while bonding and strengthening the relationship between an organization and its employees. 

Company-branded gifts have taken a major downturn. “Cheap” things with company logos on them are ranked first in the “Worst gifts ever received by a company employee.” Moreover, company-branded items drive the least satisfaction and are least appreciated by the millennial population segment. 

To learn more about developing strategies for your organization, check out The KPI Institute’s Strategy and Business Planning Professional Certification.

Stakeholder Management as Key to Outstanding Performance

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Image Source: jplenio | PIxabay

For an organization to achieve and sustain outstanding results that meet or exceed the expectations of its stakeholders, it is necessary to define an inspiring purpose, create an aspirational vision, develop a strategy centered on creating sustainable value, and build a winning culture.

Direction setting prepares the way forward for the organization, but it needs to execute its strategy effectively and efficiently. The organization must

  • know who the stakeholders are in its ecosystem and engage fully with those that are key to its success;
  • create sustainable value;
  • drive the levels of performance necessary for success today and, at the same time, drive the necessary improvement and transformation once it becomes successful in the future.

When stakeholders that are the most important to the organization, such as key stakeholders, and are independent of the specific groups have been identified, it is likely that there is a degree of similarity in applying the following principles when engaging key stakeholders. 

An outstanding organization:

  • identifies the specific types and categories within each of its key stakeholder groups;
  • uses its understanding of the key stakeholders’ needs and expectations to achieve continuous engagement;
  • involves key stakeholders in deploying its strategy and creating sustainable value;
  • recognizes the contributions the key stakeholders make;
  • builds, maintains, and further develops the relationship with key stakeholders based on transparency, accountability, ethical behavior, and trust;
  • works with its key stakeholders to develop a common understanding and focus on how, through co-development, it can contribute to and draw inspiration from the United Nations Sustainable Development Goals and Global Compact ambitions; and
  • actively gathers the perceptions of its key stakeholders rather than wait for them to make contact.

Build Relationships and Ensure Support for Creating Sustainable Value

Partners and suppliers are the external parties that the organization chooses to work with to fulfill its purpose, achieve the vision, deliver the strategy, and reach shared objectives that benefit both parties.

In practice, we find that an outstanding organization: 

  •       understands the stakeholder model for its key partners and suppliers, with a clear segmentation based on the organization’s purpose, vision, and strategy;
  •       ensures its partners and suppliers act in line with the organization’s strategy and that mutual transparency, integrity, and accountability in the relationship is established and maintained;
  •       builds a trusting relationship with its key partners and suppliers to support the creation of sustainable value;
  •       works proactively with its key partners and suppliers to leverage the culture, expertise, and know-how of both parties and achieve mutual benefit.

Partners are considered operant resources that should also act on operand resources to co-produce value with customers and the firm to ensure the best results are delivered to customers. 

It’s a matter of value creation, which considers partners part of the core competencies. We should focus on choosing them and how they interact on the value chain to help improve the results in customer satisfaction and customer involvement.

Choosing the Right Partner

It’s a matter of interest. This is how Benoit Hanssen, the chief technical officer of Hutchison CP Telecommunication Indonesia, described one of the ways of choosing the right partner.

He said that as long as business goals match the partner’s business goals, everyone can ensure that they have chosen the right partner for a long-term relationship with a win-win strategy.

Moreover, choosing the right partner adds another competitive advantage to businesses. This occurs by depending on them to be part of the business and learn how to deal with customers and by increasing their participation in the value co-creation. 

Open relationships in terms of communication and exchange of data is another factor in choosing the right partner.

They have to ensure a smooth exchange of information with the firm for a long-term relationship that will bring benefits to both entities. This is accompanied by removing the boundaries between firms and their partners. Vargo and lusch stated that partners should agree on having an open relationship from the beginning while firms have to ensure fair treatment for all their partners. They also added that firms’ partners should understand the environment they will work in, the cultural boundaries, and the cultural development; all of these are considered important factors that partners should contribute to understanding them and acting with the firm according to them.

Attractive costs and full attention to the risk of offers delivered to the market are other factors when choosing the right partner. Partners should work closely with the firm to convey their solutions to the firm within the budget offered and make sure that the solutions offered can effectively add value to the firm and help improve their business. This is done by having partners who focus on developing their businesses research and study the market and the business they are partnering with. This way, they can develop solutions that can continuously help their partner (the firm) solve their problems, improve their presence in the market, and develop benefits among other competitors.

Improving the existence in the market and increasing the resources available to have additional knowledge about the market needs and perform strongly among other competitors are reasons for choosing the right partner. This directs us to more factors that play a major role in choosing business partners: a partner that has good knowledge about the market and customer needs and can add value to the firm through resources and capabilities.

Moreover, when firms try to offer more services or products to the market that are considered new for the firm in terms of capabilities and resources available, it may not be enough to proceed with such an option. Even when firms enter new markets, there are reasons to dig deeper in other firms’ strategies and potentials. It is important to look for partnerships with advanced capabilities and resources that are not just focused on the present time but are ready for technological developments and to produce outstanding output.

On the other hand, a partner’s reputation in the market is crucial. It gives the firm an advantage before its competitors because customers, suppliers, and even other partners will consider competitiveness as a reason to consider the firm.

In addition to reputation, previous achievements that are related to the quality of solutions offered by firms are also important. It will reduce the amount of pressure when monitoring partners’ outputs, especially when they offer services that are difficult to monitor.

Moreover, managerial capabilities should be taken into consideration when choosing a partner since it can play a major role in helping the firm learn more from this partner and facilitate the exchange of skills and experience.

If you’d like to learn more about developing the strategy of your organization, sign up for The KPI Institute’s Strategy and Business Planning Professional Certification.

Reference: EFQM Model

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