What is the most crucial asset owned by an organization? In the modern business landscape, a company might possess a well-defined vision, mission, and set of value drivers, along with a carefully articulated strategy and aligned objectives throughout all levels of the organization. Nevertheless, employees may fail to adopt these values, as these are not inherently embedded in their actions due to the absence of a performance-driven culture.
Hence, the company must foster a culture that actively facilitates the execution of its strategy. This culture should empower every employee to operate in alignment with the established value drivers, behavioral norms, and competencies set forth by the organization to fulfill its mission while being consistent with overarching corporate goals.
Central to cultivating a successful performance-driven culture are leaders. They stand as key influencers, coaches, and role models. Organizations must shift their focus from having managers who assert authority to nurturing leaders who coach and guide. These leaders should serve as advocates for aligning and interpreting corporate objectives for employees at all levels. Proper training is fundamental in equipping them to effectively manage their subordinates.
To enable leaders to construct a thriving performance-driven culture, organizations can implement the following steps:
Build the desired organizational culture. Foran organization to define the fundamental characteristics of its desired culture, it must translate its mission and vision into tangible value drivers, anticipated behaviors, and needed competencies. These elements must be communicated extensively to all employees, ensuring their adoption, with an emphasis on starting this process with the leaders themselves.
Highlight a leader’s role in cultivating performance excellence. Leaders are essential in shaping the desired performance culture within an organization. They lead by example, embodying cultural values, behaviors, and skills. This sets a motivating tone for their teams and encourages others to follow suit. Effective leaders foster openness and feedback, which leads to transparency and collaboration. They recognize and reward behaviors that match the culture.
Additionally, they provide coaching and growth opportunities to empower employees. This creates an environment where everyone feels valued and engaged, forming the basis of a performance-driven culture.
Foster performance by promoting employees’ mental wellness. In creating a culture of performance, the importance of nurturing a healthy mindset and prioritizing employees’ mental well-being cannot be overstated. A positive mindset is crucial for a culture of excellence. Employee mental health directly affects engagement, productivity, and satisfaction. Providing resources like counseling, stress management, and flexible work options not only demonstrates commitment to well-being but also leads to a focused, creative, and productive workforce. A mental health-supportive culture enhances individual well-being and aligns employees with organizational values, ultimately improving performance.
Empower performance culture through data interpretation. Organizations have a wealth of data that offer insights into employee engagement, performance, and overall health. Leaders must use data analytics to guide culture development. By studying metrics like satisfaction, productivity, and alignment with values, leaders can spot improvement areas and measure initiative impacts. This data-driven approach refines strategies based on evidence, creating a flexible culture. Regular data analysis shows employees that their contributions matter, boosting transparency and commitment to growth.
Successful examples
Googleprovides a noteworthy example of a strong performance culture as exemplified by initiatives like Project Aristotle and Project Oxygen. Project Aristotle highlights team dynamics and psychological safety, fostering an environment where all members freely share ideas and take calculated risks. Meanwhile, Project Oxygen focuses on effective leadership qualities such as coaching, communication, and genuine care for team members. These initiatives underscore Google’s dedication to establishing a culture of collaboration, innovation, and leadership, creating a thriving workplace for both teams and individuals.
Another notable example is Netflix,which embodies a performance culture centered around “seeking excellence.” This entails encouraging each employee to excel and contribute to produce their best work. Netflix values individual responsibility and open feedback, creating an environment where high standards and innovation are prized. The company hires top talent and empowers them with trust and autonomy. This adherence to excellence shapes their decision-making and has contributed to Netflix’s success.
Creating the right organizational culture lays the foundation for success. Leaders drive performance excellence by setting an example and supporting their teams. Taking care of employees’ well-being adds to the positive atmosphere, and using data helps leaders make smarter choices. Combining these aspects builds a culture where everyone thrives, innovation flourishes, and organizations prosper.
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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.
Khalid G. Alharbi boasts over 20 years of experience in partnering with business unit executives to develop strategic plans, direction, market analysis, partnership, growth guide, and operation excellency. He leads large and complex projects to achieve key business objectives and promote digital transformation. He is pursuing a career in engineering, project management, sales and strategy planning. In this interview with Performance Magazine, he shares the highlights and insights of his career, providing valuable glimpses into his journey and accomplishments.
Would you tell us more about your educational and professional background? How did your previous experiences lead you to your current position?
I started as a telecom operation engineer working in the field and gradually moved to telecom planning. This gives me a full insight into the value chain of my profession. Then, I moved to the project management field as a Certified Project Management Professional (PMP) working in 2030 Vision programs.
After that, I went into the business development and sales field, looking for more opportunities based on my company’s strategic direction utilizing the skills in planning and project management I acquired from my previous work. Finally, I worked directly in formulating, implementing and measuring the performance of different strategies since 2018.
What are your main responsibilities and goals in your current role?
My major responsibilities as the Strategy and Policy – Acting General Manager are overseeing the sector’s strategy formulation, implementation and monitoring, directing research and statistical studies, including the standard development and licensing process while ensuring compliance with overall cultural strategies, policies, and standards.
Please take us through your daily job routine. Could you describe in detail your activities and work hours? You may specify certain areas of your job, such as your work arrangement (remote, on-site or hybrid) and the stakeholders you frequently contact or meet with.
My daily activities and work hours are spent monitoring the team tasks and responsibilities toward the strategic direction while conducting the coaching sessions. On top of that, I review indicators and matrices achieved looking for improvement.
Do you think that strategy and performance management in the public sector is different from that in the private sector? How?
Yes, by changing the targeted customer, including beneficiary and strategic direction. For example, the strategic direction in the public sector often focuses on the final beneficiary (citizens, residents and other government sectors) and the services provided to them. Moreover, the public sector focuses on measuring beneficiary satisfaction, improving service quality, sustaining provision, and reducing the sector’s burden in service delivery.
As for the private sector, the focus is on return on investment, as well as ensuring cash flows and the effectiveness of operational processes to reduce expenses.
What are the main achievements you are proud of thus far during your time working in strategy and performance management in the public sector?
So far, the main achievement I am proud of is my participation in formulating and implementing two strategies in the public sector.
What are the main challenges that you face working in strategy and performance management in the public sector? When faced with such challenges, what do you do?
One of the main challenges that I face working instrategy and performance management in the public sector is the shortage of manpower which leads to distraction.
For the future of your career, do you intend to keep on working in the public sector, switch to the private sector, or does the sector not really matter to you? Why?
Recently, the public sector has closely aligned with the private sector in terms of social and economic impact. This has led to a strategic shift, prompting me to consider either public or private.
If someone is looking to work in strategy and performance management in the public sector one day, what skills, knowledge and experience would you advise them to acquire?
From my point of view, to excel in strategic work and stand out, one must master employee management, ensuring subordinates adhere to policies and procedures while also possessing deep strategic thinking, maximizing gains, building strong relationships, and gaining trust to effectively implement required tasks.
In addition to analytical skills, data linking, project management, and financial planning, one should also possess the ability to set standards, develop policies, and master persuasive storytelling.
Khalid G. Alharbi will delve deeper into his insights on performance management in the public sector in the upcoming government edition of Performance Magazine. For updates on the publication release, please follow The KPI Institute’s LinkedIn page.
Corporate sustainability (CS) represents a business approach that creates long-term shareholder value by embracing opportunities and managing risks derived from economic, environmental, and social developments, Yale University states. Organizations are increasingly realizing that their long-term success and profitability depend on measuring the financial impact of CS initiatives for several reasons: enhanced risk management, increased cost efficiency, greater investor demand, and improved brand reputation—ideas that were highlighted in a 2022 paper from the International Journal of Economics and Management.
The NYU Stern Center for Sustainable Business developed the Return on Sustainable Investment (ROSI™) framework as a methodology used to evaluate the financial performance and returns generated from sustainability initiatives. It aims to measure the economic benefits derived from sustainability investments and assess the value created for the organization.
ROSI™ assists decision-making processes, resource allocation, and the prioritization of sustainability investments based on their potential financial returns. The framework also facilitates communication with stakeholders (i.e. investors, customers, and employees) by quantifying the financial value created through sustainable practices. The sustainability drivers of financial performance and competitive advantage based on ROSI™ methodology can be consulted below (see Figure 1).
Entities need to follow a clear set of steps to implement the ROSI™ methodology, per The NYU Stern Center for Sustainable Business:
Identify material sustainability practices.
Determine the potential benefits that might drive financial and societal value from sustainability-focused practices.
Quantify benefits derived from the sustainability practices.
Derive a monetary value for the benefits.
The main advantage that ROSI™ brings is helping companies make a compelling business case for sustainability, driving both financial value and positive societal impact while advancing sustainability goals, as NYU Stern concludes in a report published in 2021.
HSBC Bank USA and the NYU Stern Center have launched the Food and Agriculture Sustainability Strategies Framework, based on ROSI™ to help food and agriculture companies make a business case for sustainable initiatives that deliver financial value and societal impact. The framework identifies twelve sustainable strategies and describes practical suggestions for calculating returns. It serves as a strategic tool for unlocking the advantages of sustainability and driving real change in the industry.
According to Forbes—and adapted to adhere to The KPI Institute’s KPI naming standards—% Return on investment (% ROI) is a KPI that measures the efficiency or profitability of an investment or compares the efficiency of several different investments. This metric is also used to measure and evaluate the financial impact of organizational sustainability initiatives, making it easier to understand the value proposition of certain environmental, social, and governance (ESG) criteria used in socially responsible investing. A positive % ROI score indicates a profitable outcome, as the gains generated from the investment exceed the costs incurred (see Figure 2).
An article from Brightest presented findings based on data gathered between 2020 – 2023 from five top companies that measure the ROI of sustainability. It stated that companies like HP Inc. ($3.5B), Unilever ($1.2B), McKesson ($227M), Nike ($50M), Anheuser-Busch ($7.5M), and Medtronic ($2.2M) earned extensive profit from internal cost savings actions based on sustainability criteria like energy efficiency or waste reducing. By demonstrating the financial value of sustainable practices, % ROI enhances the business case for social investment and encourages stronger ESG administration, balancing monetary performance with social and environmental impact.
ROSI™ and % ROI are valuable tools for measuring the financial impact of sustainability initiatives. ROSI™ goes beyond traditional metrics, helping companies understand the value of sustainability strategies. Meanwhile, % ROI quantifies the fiscal returns generated, enabling data-driven decision-making. Together, they support making informed choices, practicing accountability, and leaving behind a positive environmental and societal impact while delivering long-term financial value.
All performance frameworks—whether it is the Balanced Scorecard (BSC), Objectives and Key Results (OKRs), Management by Objectives (MBO) or the Performance Prism—have a shared DNA and purpose: to create synergy in the organization to optimize key results. However, two important questions need to be asked: which performance framework should a company implement and what should one consider when selecting a performance framework?
A well-defined performance framework enables the organization to achieve its desired goals, and having various performance frameworks in hand can make it a bit tricky to choose the right one. Thus, one might be tempted to try implementing what big companies such as Google have implemented and attempt to do the same within their own organization without contextualizing the company culture, size, and business nature.
This article will illustrate the four things to consider when selecting a performance framework for the organization.
Understand your company’s goals and objectives.
It would be silly to start furnishing an empty room without first understanding its intended purpose. Is it going to be for dining or a personal workspace? The same thing can be said when selecting a performance framework. Understanding the company’s goals and objectives is crucial as it will give you a sense of direction. For example, if the company’s goal is to have a disruptive, innovative product or achieve fast growth, then you might consider the OKRs framework as it will enable you to set challenging objectives and provide flexibility to support innovation. On the other hand, if the company’s objectives gravitate toward stability and sustaining the current market share with modest growth, then the BSC is more suitable for this type of environment as it will assist in cascading the objectives from the top down and preserve company status quo while supporting growth at the same time.
Consider the company size and structure.
When we talk about company size, we are not only talking about its capital and asset value, but we are also talking about its workforce size and how they are structured into various functions. If the company has a huge hierarchical structure where each employee is expected to perform a very specific and specialized task that is repetitive and operational, then selecting a framework that exhibits this nature of work will enable the company to create clarity and focus for the employees. A framework to consider for this purpose is MBO, which is defined by The KPI Institute as “clearly setting and defining objectives agreed by both management and their employees.”
Involve internal stakeholders in the selection process.
Highly engaged employees produce substantially better outcomes, are more likely to stay at their organization, and experience less burnout, according to analytics and advisory firm Gallup, Unfortunately, employees can’t reach that level unless they feel that their day-to-day tasks are linked to the company’s purpose and that they have an impact on the results. A good performance framework should be able to convey this to the employees. Asking employees what they value the most and involving them in the decision-making process will result in a highly engaged organization and limit the silo work environment. A performance framework should not be imposed but rather tailored to serve the company’s goals and its human capabilities.
Review and assess the performance framework.
Just like a strategy review, a performance framework needs to be reviewed regularly and not ossified and treated as set in stone within the organization. As the company’s strategy, size, and market grow and change, the performance framework needs to be updated and changed as well.
In conclusion, selecting a performance framework is only the first step. It is a tool for enablement, not a purpose. All performance frameworks can be customized to fit the company’s needs—these are not off-the-shelf products that must be implemented as-is. Nevertheless, other factors play a huge role in executing performance frameworks, such as employee engagement, company structure, and business processes. All these factors influence and impact which framework to select.
This article was written and submitted by Ms. Wedad Alsubaie, who works at the Strategy Management Office of the National Unified Procurement Company in Saudi Arabia.
Today’s fast-paced and rapidly changing business environment is characterized by uncertainty and the interdependence of economies, societies, and markets. Thus, organizations are facing numerous challenges that can threaten their ability to survive and thrive. According to the Harvard Business Review, the key forces stressing the business landscape include the pandemic and geopolitical instability along with other factors, such as technological disruption, climate change, and globalization. Unsurprisingly, given these difficulties, business leaders decided to focus on organizational resilience in order to adapt to this dynamic environment, leverage opportunities, and deliver sustainable performance improvement.
In a report from Cranfield School of Management, Professor David Denyer defines organizational resilience as the ability of an entity to anticipate, prepare for, respond to, and adapt to incremental change and sudden disruptions to survive and prosper. His paper underlines the idea that organizational resilience requires special control over multiple independent and redundant layers of protection for all critical assets (people, products, property, information) and compliance (standard operating procedures, processes, and training).
Organizations can increase their resilience by adopting various frameworks and models (see Figure 1).
To increase resilience, organizations should develop capabilities, competencies, and principles that are aligned with their chosen resilience framework or model. Some of the capabilities and competencies that can enhance resilience include leadership commitment, risk management, business continuity planning, incident response planning, communication, training, and awareness, according to Stephanie Duchek’s article from 2019. In addition, the six principles stated by Harvard Business Review for enhancing organizations and decision processes to become more resilient can be consulted (see Figure 2).
The International Consortium For Organizational Resilience (ICOR), a global consortium of business continuity and resilience professionals, developed a model based on ISO 22316. The model is composed of three dimensions (leadership & strategy, preparedness & managerial risk, and culture & behavior) with nine strategies directly subordinated to them and six sets of corresponding behaviors. One benefit of the ICOR model is its structured approach to resilience management, which can help organizations better understand their vulnerabilities and develop more effective risk mitigation and response plans. The model also emphasizes the importance of ongoing evaluation and improvement of resilience plans, which can help organizations stay ahead of evolving threats.
There are some limitations to the ICOR model that may not be suitable for all types of organizations— particularly smaller or less complex ones—because, in comparison with big enterprises, most SME owners do not have access to resilience training and tools or their employees are not involved in the development of strategies to increase an entity’s resilience, as stated by the International Labour Organization. Additionally, the model may not adequately account for potential cascading or interdependent risks.
Despite its limitations, the ICOR model is widely used to measure resilience in a variety of industries, including healthcare, transportation, and manufacturing. It is important to mention that this model is not used in most cases by itself, but rather in combination with one or more frameworks or models mentioned above, depending on the needs and the industry in which the organization operates.
To thrive in today’s tumultuous business environment, organizations must develop the capabilities and competencies necessary to anticipate, prepare for, and respond to disturbances effectively.
