Like a captain steering a ship through a stormy sea, leadership plays a crucial role in shaping the organizational climate, which in turn affects the individual’s level of commitment to the organization, job satisfaction, and productivity (Oktem, 2022). Creating a positive organizational climate requires management to focus on promoting autonomy, freedom, and support. Organizations can use internal environment scanning methods such as employee surveys, focus groups, and organizational culture analysis to gain insights into how leadership affects the work environment—knowledge that can then be used to create a positive climate to enhance employee knowledge, behavior, and effectiveness.
Critical factors such as interaction with team members, behavioral patterns, and the quality of the leader’s information—which covers updates, decisions, and strategic plans that they need to communicate to their team—all shape the organizational climate. Leadership behavior can significantly influence employee attitude and behavior. Studies have shown that managers who acknowledge their team members’ accomplishments can improve the perception of the organizational climate and leadership quality.
Conducting an internal environment scan can help assess the current state of the organizational climate and identify opportunities for improvement. Theorganizational culture analysis, a method of internal environment scanning, involves reviewing the values, beliefs, and behaviors of employees and aims to gain insights into how leadership is perceived and how it is influencing the culture of the organization.
One company that values itsorganizational culture and recognizes the significant role of leadership in shaping the work environment is Netflix. The company empowers employee decision-making by widely sharing internal documents, such as memos on title performance, strategy decisions, and product features.
Additionally, Netflix prioritizes open and direct communication by investing in coaching and modeling behaviors. To promote good decision-making, the company emphasizes the need for highly effective people and fewer management layers. The company encourages a “context not control” culture where leaders are expected to coach, set context, and provide feedback instead of micromanaging while employees make their own decisions. To foster this culture, Netflix values certain behaviors and skills in its employees, such as good judgment, selflessness, courage, communication, inclusion, integrity, passion, innovation, and curiosity.
The company employs a feedback system that includes surveys and focus groups to continuously improve its operations. A recentinitiative to promote work-life balance involved the implementation of an unlimited vacation policy, which was contingent on fulfilling job responsibilities and goals. To set a precedent, leaders take vacations themselves and urge their teams to do likewise.
As we can clearly see from Netflix’s example, leadership has a significant impact on the organizational climate. This highlights the importance of internal environment scanning to identify opportunities for improvement.
Improve your organizational climate by enrolling in ourCertified Strategy and Business Planning course. Gain valuable insights into the process of internal environment scanning and learn how to identify areas for improvement within your organization.
In 2016, President Abdel Fattah El Sisi exhibited tremendous support for Sustainable Development Strategy: Egypt Vision 2030. Since then, Egypt has undergone a major digital transition to modernize its economy, improve public services, and boost digital literacy. To attain such goals, the country has invested heavily in education, research, and technical infrastructure. This article will analyze Egypt’s recent technological developments across three main pillars.
Infrastructure development
The Egyptian government has invested considerably in the development of its digital infrastructure to provide reliable and high-speed internet connectivity across the country, such as expanding its fiber optic network to connect more households and businesses to the internet. As of 2020, more than 70% of the country’s population had access to the internet. Egypt has allocated more than $1.1 billion for the development of 5G technology and infrastructure. Adopting new technologies, such as 5G, will provide faster internet speed and improve connectivity across the country.
E-government services
According to the ICT 2030 strategy, Egypt has made significant progress in digitizing its government services, which has made it easier for citizens to access essential services online. In 2020, the Egyptian E-Government Services Portal was launched, providing a one-stop-shop for government services such as applying for passports and IDs. The portal offers more than 100 services, and as of 2021, more than 6 million citizens have registered for the service.
Financial inclusion & e-commerce
Meeza card, a national electronic payment card launched in 2019, allows citizens to receive their salaries, pensions, and other government payments electronically.
Egypt’s digital transformation has paved the way for private companies to launch several mobile payment applications, such as Fawry, Instapay, and Vodafone Cash, allowing citizens to pay bills, transfer money, and make purchases using their mobile phones.
The following explains why Egypt’s case should serve as a model based on two main motives:
Economic growth
The digital sector has been one of the fastest-growing sectors in Egypt, contributing significantly to the country’s GDP. According to a report by the governmental statistics, the ICT sector contributed 5% to Egypt’s GDP in 2021, and digital exports reached $4.9 billion by 2022.
Financial inclusion
The digitization of financial services has increased financial inclusion among Egyptians. According to a report by the MCIT, 56% of Egyptian adults have a bank account. Moreover, the money wallet accounts are expected to reach 57.9 million in 2025, which is higher than the average for countries in the Middle East and North Africa. In conclusion, Egypt’s digital transformation has advanced due to government investments in infrastructure, education, and innovation.
Digitizing government services, increasing digital literacy, and the government is pursuing digital transformation to meet its long-term aims. Last but not least, a valuable resource for those seeking to enhance their knowledge and skills in strategy planning is The KPI Institute’s Certified Strategy and Business Planning Professional course. It is recommended to sign up for this course to learn more about strategy planning.
Attending to the need to differentiate between the various types of innovation paves the way to measure and manage them better toward achieving higher returns. Disruptive innovation, as one of a kind, often starts in low-end or emerging markets. In terms of low-end footholds, low-end customers are offered a service or a product that would better meet their needs than what they currently have. When it comes to new market footholds, a market is offered a service or a product that does not already exist to gain customers and a market share.
When first launched in San Francisco, Uber did not fall under the category of disruptive innovation because it offered a similar service to lower-end customers, who were already used to making bookings for rides.
However, I believe that Uber had a disruptive innovation because when it offered its services, it did not just provide taxi services where people could book a ride. It also allowed regular citizens to use its cars once they met the company’s standards. At the same time, Uber provided customers with an application to track the history of their bookings and current rides and let them know in advance how much it would cost and how much it would cost if they chose a different option.
We need to know exactly what Uber started with while providing its services to determine whether these were the ones that low-end customers wanted and which of them were not available at that time. Also, we may argue that the process was part of sustaining innovation because that type of service was handled later.
The shift in markets between low-end and unserved customers and mainstream markets is important to consider when addressing innovation since it links to your risk tolerance and ability to address challenges in more agile or rigid ways. Mainstream markets require agility, high-risk tolerance, adaptability, resilience, and confidence that what we offer meets the needed added value.
The article then links disruptive innovation with process innovation that keeps developing and also with collecting and understanding customer needs to provide them with what suits them the best. This takes us back to the service-dominant logic where all this has originated, since co-creating value with customers and considering them as the main part of what you can or will offer in the market will be the key to success at any time.
I believe that we do not know what our customers need. We may guess and think we are smart because now we track all they do and, accordingly, using AI algorithms, can predict and understand what they need. However, this does not mean we should neglect their real presence in the value chain. That’s why I think innovation is being targeted as a separate domain where we are giving it a separate and unique focus. Nevertheless, innovation should be referred to along with all the other shifts we have had in the world, where it can be a trigger, catalyst, or driver for a more sustaining, successful, and powerful shift (Clayton M. Christensen, Michael Raynor, and Rory McDonald, 2015). I have reached the conclusion that the full theory of disruptive innovation should only be applied when certain conditions are met.
In my opinion, discussing certain conditions for applying the complete theory of disruptive innovation leads us to the ecosystem in which we all live. This is where many layers surround us and many stakeholders are interested in and affected by what we do. Similarly, such an ecosystem is heavily influenced by megatrends (as described by the EFQM ecosystem) that impact everything around us, such as the SDGs, sharing economy, and disruptive technologies, to name but a few. The megatrends are triggered by global shifts, nature, and climate change, shifts in the industrial revolution, and shifts caused by the outbreak of coronavirus, among others. Theories have been established per certain circumstances and with certain megatrends affecting a smaller world (smaller in a way where we have less population, less technology, fewer changes, and fewer needs). However, such theories, including disruptive technology, should be re-examined in order to adapt them to the new environment, where they might serve as the foundation or baseline for new changes, shifts, and transformations (Andrew A. King and Balhir Baatartogtokh, 2015).
Car sharing, smart cars, electric cars, and autonomous cars are all emerging trends in the automotive industry. These businesses quickly respond to customer demands and take advantage of opportunities that will increase in value over time while also carrying a high-risk tolerance. Automakers currently pursue these strategies to learn from Nokia, which has failed to recognize how quickly the world is changing and how important it is for us to be flexible, responsive, and, in many cases, ahead of others to lead the market.
Ford, in my opinion, is still trying to keep its core business of manufacturing cars while also understanding the market in a way that allows the company to be seen as either a leader or a follower, depending on how it responds to changes and shifts. Leaders are those who use benchmarking to set themselves apart from the pack.
So, for each of the above-listed shifts or transformations in the automotive industry and car usage behaviors, depending on different generations and their needs, it seems that businesses try to benchmark what they need to adapt to with other industries by understanding what the latter has done to adjust to changes and shifts, what innovations they have created, how customers have perceived these innovations, and how they have changed their behavior or accepted new lifestyles.
Accordingly, Ford has decided to continue with its main business of making and selling cars while simultaneously introducing new and additional services to adapt to, follow, and steer the changes in the automotive industry. That leads to a trend towards the usage of automobiles as a service, similar to SAAS (software as a service): Customers utilize cars as a service rather than a product, depending on their needs. This is how Ford has used disruptive innovation, which was mainly based on learning, analyzing, and continuous process of generating value and innovations (Ernest Gundling, 2018).
The monitoring, evaluation, accountability, and learning (MEAL) concept should be incorporated into the future corporate performance management system, according to Dr. Loai Fathi Naser, an Assistant Professor in Management at Israa University. He adds that MEAL must be implemented and promoted throughout the formal structure and culture of an organization. In this article, Dr. Naser further discussed how organizations can prepare for managing performance in the future and how to use KPIs as navigational instruments.
Trends
What were the key trends in Organizational Performance in 2021 from your point of view?
2021 is now over. Organizations have faced many challenges throughout the year that affected its operations. The key trends in organizational performance management that emerged in 2020 and seem to continue in 2022 are digital transformation, artificial intelligence capabilities, polishing skills of remote working, and emphasis on wellness and mental health.
Which of the existing trends, topics, or aspects within Performance Management have lost their relevance and/or importance, from your point of view?
I think that polishing skills for remote work lost its importance due to the gradual shift to the normal situation after the COVID-19 pandemic has ceased.
What does the corporate performance management system of the future look like?
According to the Top 3 Enterprise Performance Management Methods by profit.co., contemporary management processes are moving towards customization, flexibility, and agility. These are some of the key changes considered essential for any progressive performance management system. To adhere to agility and flexibility, the performance system should apply and promote the MEAL concept within the organization’s formal structure and culture. Organizations should focus on team performance vs. individual performance, clearly define KPIs and criteria for compensation, and integrate digital tools and technology deployment in the performance appraisal process.
What will be the major challenges in managing performance in the future and how should organizations prepare for them?
One of the major challenges in managing performance in the future is the lack of chances for managers to check in on an employee’s performance and keep them aligned because of neglecting consistent communication and the opportunity of having informal communication between the manager and employee. Designing key performance indicators (KPIs) for performance management would help organizations attract and retain a good caliber of staff through financial and non-financial means. Staff should have professional development plans that are regularly reviewed and updated.
How is technology impacting the way organizations conduct strategic planning and manage performance? Any specific technology tools you would like to mention?
Organizations should integrate digital performance tools into their team’s workflow to see positive results from the process. Making performance feedback a natural part of day-to-day work makes coaching employees and managers alike easier. One software that is available in the market is Synergita. It measures and monitors employee performance in real-time. Synergita also tracks the progress of employees. It helps organizations strengthen their HR tech stack to build high-performing teams.
How is sustainability impacting the way organizations conduct strategic planning and manage performance? Any specific sustainability aspects you would like to mention?
The practice of corporate sustainability leads to sustainability of performance and increases the efficiency of strategies, leading to greater performance. Among sustainability dimensions, it is important to note that the social sustainability aspect has the highest impact, followed by the economic and environmental aspects.
Practice
The COVID-19 pandemic has caused disruptions in our day-to-day lives, social relations, economies, and business dynamics. Given the impact of the crisis, what do you think are the specific changes in the way strategic planning and performance management is being conducted post-COVID?
Performance management under COVID-19 needs planning for uncertainty and developing a range of scenarios. It needs a clear view of a starting position in the wake of the pandemic. A social feedback system provides the employee with a larger amount of feedback (often 50 or more instances over the course of a year) from peers and others. This reduces the emphasis on receiving feedback from the employee’s manager alone. Recalibrating KPIs is essential to ensuring that remote work actually works.
What should be improved in the use of strategy and performance management tools to make an organization even more resilient to future crises?
Well-designed KPIs work as vital navigational instruments. They give a picture of the current level of the organization’s performance and find out whether the business has achieved its goals and objectives. KPIs work as standards for future performance during crises.
While navigating through these challenging times, what would you consider a best practice in Performance Management?
Honest performance appraisals for employees need leadership skill rating. The result of an employee’s good performance could be increased production, customer growth, and an enjoyable work environment. However, poor employee performance may result in just the opposite. One of the tools used to gauge employee performance throughout the year is a performance appraisal.
How does benchmarking support the improvement of performance management and target-setting systems?
Organizations engage in benchmarking to achieve the industry’s best practices and to keep abreast with competitors. Benchmarking serves as a performance management strategy by setting performance standards. It identifies performance gaps by comparing actual with target performance.
Background
Dr. Loai Fathi Naser has over 17 years of experience in program management and organizational development. As an assistant professor, he has more than 12 years of experience in academic teaching and training in Business and Management courses such as Corporate Governance, Entrepreneurship, Microfinance, Institutional Development, Strategic Planning, Project Management, Human Resource Management, Business Communication, and Total Quality Management.
As an organizational development consultant and trainer, he leads teams in organizing program evaluation, organizational capacity assessment, financial transparency and compliance, and conducting capacity-building training and coaching.
Having a clear vision for your organization and being aware of its external environment to prevent threats and capture opportunities instead. This is how strategic thinking works for Fadi Al-Jafari, a Senior Management Consultant, Leader of Data Analysis and Visualization Center, and Project Manager at The KPI Institute. In this interview, he explains what makes a strategy and performance manager successful and how organizations can make sound decisions on the spot.
Trends
What were the key trends in Organizational Performance Management in 2021, from your point of view?
Organizations are working on digitalizing performance management systems (PMS) and ensuring that individuals have the right digital tools to perform their duties as they work remotely nowadays.
Which of the existing trends, topics, or aspects within Performance Management have lost their relevance and/or importance from your point of view?
Regarding the vast changes in external environments, organizations are shifting their strategy planning and execution practices from the traditional approach to the agile approach to make sure they capture the external opportunities and avoid the external threats in the early stages. This will help them adapt in a fast manner to those changes.
What does the corporate performance management system of the future look like?
Digitalized PMS that connects and measures individuals, teams, and organizational work in a timely manner to help top management make decisions on the spot
What will be the major challenges in managing performance in the future, and how should organizations prepare for them?
The major challenges would be how to measure the individual’s performance right and without any biases, use the data to predict future the individual’s performance, and benefit from the data they have to improve the individual’s performance. One solution is to use digital PMS that collects data regularly and measures individual performance based on the tasks they work on and then use data analytics tools to draw conclusions and predictions based on the analysis.
How is technology impacting how organizations conduct strategic planning and manage performance? Any specific technology tools you would like to mention?
Technology is a key element in supporting strategy. Technology supports environmental scanning tasks as organizations can nowadays collect and analyze data on a timely basis. They can analyze their internal environment as well as their external environment. In addition, technology also helps in predicting trends.
Technology helps organizations gather real-time data and big data. Having such big real-time data helps organizations make sound decisions based on facts and figures. Using tools like Tableau and Power BI helps an organization create real-time dashboards that show the trends and changes in data. In addition, organizations can use those tools to predict outcomes to support proactive planning.
How does sustainability impact how organizations conduct strategic planning and manage performance? Any specific sustainability aspects you would like to mention?
Sustainability requires organizational objectives and strategy to consider the social welfare of the employees and communities.
Practice
The COVID-19 pandemic has caused disruptions in our day-to-day lives, social relations, economies, and business dynamics. Given the impact of the crisis, what do you think are the specific changes in the way strategic planning and performance management is being conducted post COVID?
Organizations should focus more on creating an intelligence unit that monitors the minor and major changes in the external environment on a continuous basis. This would help them identify risks or new trends that could affect the environment. This would also help organizations become more proactive and make decisions about needed actions once they have identified the risks.
What should be improved in using strategy and performance management tools to make an organization even more resilient to future crises?
Organizations should shift their mindsets from the usual strategic management approach to a more agile approach in planning and execution. This will help organizations adapt to changes faster based on external circumstances.
While navigating through these challenging times, what would you consider a best practice in Performance Management?
To start with an organizational architecture framework of the PMS, ensure that cascading and alignments are conducted properly. This also enables organizations to develop a governance framework, processes, and procedures to efficiently run the system and avoid internal silos.
How does benchmarking support the improvement of performance management and target-setting systems?
Benchmarking is a process that involves identifying and learning from the best performers in the organization. It helps develop new and challenging targets and measures that will support organizational growth.
Research
Which organizations would you recommend to be observed due to their approach to managing performance and its subsequent results? Why?
I would say Saudi Vision 2030 is a good example to be studied and followed at the national level. Organizations can follow this example and learn how the vision realization offices in Saudi handle such vision and ensure alignments between different entities. The results that Saudi achieves are astonishing, and it can be a great case study.
What aspects of Performance Management should be explored more through research, given their importance in practice?
Alignment approach between business units, departments, and divisions. This approach is requested a lot by clients to know how to handle such alignments internally.
What are the key competencies of a successful business leader ( C-level Executive)?
The business leader must show strategic thinking in terms of having a clear vision for the organization and having a clear goal of what they would like to reach in the future. The business leader must employ analytical and critical thinking to analyze the external environment, capture opportunities, and avoid external threats that could affect the organization.
What key competencies would make a Strategy and Performance Manager succeed nowadays?
An important one is strategic thinking — to be able to analyze different situations that the organization may face and to have a proactive personality that would allow them to capture changes in the market before they arise. It is crucial to identify the opportunities, capture them before the competitors do, and determine any threats to prepare the organization to deal with them.
What processes and tools do you look at when differentiating a successful performance management system from a superficial one?
To have a successful PMS, organizations must have a clear design and architecture of the PMS itself within the organization, and it must have top management support. Moving forward, the strategy office should develop this system internally and develop needed tools and needed processes that include but are not limited to: Strategic Planning Tools, Processes and Timeline; KPI Selection Tools and Processes, Departmental Cascading and Alignment Tools and Processes; Employee Cascading Tools and Processes, and Performance Culture Tools and Processes. In this manner, the organization will perform standardized tools and processes that support the internal alignment between all internal stakeholders. This will ensure clear steps for analyzing internal and external environments, standardized KPIs following best practices, and more aligned objectives on different levels.
In addition, it’s also important for the top management and strategy team to communicate the strategic objectives, values, and organizational identity to all employees. Unfortunately, some organizations keep those elements hidden from the employees, and this leads to misalignment internally, losing organizational direction, huge gaps, and silos between departments and negatively impacting employee engagement. Missing one of the abovementioned points would weaken the PMS within the organization.
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Background
As a Management Consultant, Fadi has been involved in multiple projects related to designing, implementing, and auditing Performance Management Systems. This includes formulating objectives, selecting KPIs, documenting KPIs, and selecting initiatives on both the strategic and functional levels as well as developing balanced scorecards and dashboards to fit organizational needs.
As a Facilitator, Fadi has been delivering Certified Strategy Business Planning Professional, Certified KPI Professional and Practitioner, Certified Performance Management Professional, Certified Employee Performance Management Professional, Certified BSC Professional, Certified Data Analysis Professional and Certified Data Visualization Professional, in both Arabic and English languages.
