Compared to previous decades, the world has more innovative and safer cities that take better care of their citizens. A smart city represents an area that uses information and communication technology (ICT) to enhance administrative performance, disseminate information to the public, and boost the standard of services and the welfare of residents. A 2022 study reports that between 2000 and 2016, there was a global decline in the number of deaths from lower respiratory infections among children under the age of five, which fell by 54%, and roughly 13% overall.
Making a city smarter has been identified as the most effective method for enhancing residents’ quality of life and tackling urban challenges. According to a 2022 top from Ranking Royals, the smartest cities in the world have developed in the Nordic countries (namely Norway, Finland, and Denmark), Singapore, Switzerland, Taiwan, New Zealand, Spain, Austria, USA, and South Korea.
Boosting Sustainability and Citizens’ Wellness
While getting smarter, urban regions have implemented sustainable systems and tools that contribute to the Green Deal agreement. The EU Green Deal’s primary goal is to achieve climate neutrality as the first continent by 2050. That will lead to a cleaner environment, cheaper energy, smarter transportation, new jobs, and a better lifestyle. The strategies of smart cities aim to improve life quality for inhabitants by using innovative technologies and saving resources.
For example, in Graz, a smart city in Austria, energy efficiency is considered essential for future developments. In 2010, the “Smart City Graz” project, whose purpose was to transform the territory into a sustainable and energy-autonomous urban district, was launched.
Denmark demonstrates its strength and sustainability level by covering the needs for energy production without using foreign energy resources. It secures its place as the greenest country in the world by continuously practicing a sustainable economy. For instance, a 2020 case study presents one of the wealthiest areas in the world, a Danish island called Bornholm. Bornholm’s wealth comes from developing new energy market mechanisms to control energy networks with a high proportion of renewable energy resources.
To support sustainable initiatives and contribute to citizens’ welfare, Vitoria-Gasteiz city (Spain), the European Green Capital of 2012, launched a secure bicycle parking network called VGBiziz. It is a low-cost initiative comprising 9 parking sites for around 400 bikes (including electric and cargo bikes). In 2009, Valencia, Spain’s largest city, joined the Covenant of Mayors, and in 2010, it announced its first Sustainable Energy Action Plan (SEAP). The agreement should reduce GHG emissions by 40% by 2030 in accordance with the goals set forth by the Mayors’ Covenant on Climate and Energy Program. By using the VLCi Platform, a global platform for smart city management, Valencia moves forward with its Smart City Strategy.
In the 2022 Environmental Performance Index (EPI) rank, Denmark received the highest EPI score (77.90), with 14.90 points increase compared to last decade. The Environmental Performance Index is a tool for measuring the environmental performance of a state’s policies. The United Kingdom earned the second position with a very close score, 77.70. Finland occupied the third place with 76.50 points, followed by Malta (75.20), Sweden (72.70), and Luxembourg (72.30).
How to Monitor and Improve Citizens’ Wellness
Sustainability concerns not only the welfare of the planet, but also the well-being of its inhabitants. The environment can positively or negatively impact human health. People need good resources to evolve and stay healthy: fresh air, good food, and drinking water. But how can people know if they have all of these? To evaluate life quality, municipalities usually use publicly available and updated key performance indicators (KPIs), such as:
# Outdoor air pollution
# Air quality complaints
# Risk Management Index
# Environmental Sustainability Index (ESI)
% Households with a reliable supply of water
% Drinking water compliance rate
% Households with access to safe water
% Satisfaction with food quality
Since respiratory infections are influenced by air quality, specific KPIs for measuring the air level of pollution should be included in weather updates. Individuals that suffer from chronic respiratory conditions such as asthma and chronic obstructive pulmonary disease (COPD) are susceptible to the negative effects of air pollution. Asthma and COPD are aggravated and triggered by air pollution, raising respiratory morbidity and mortality. Also, cholera, diarrhea, dysentery, hepatitis A, typhoid, and polio are just a few of the illnesses that can spread due to contaminated water and poor sanitation. People are exposed to health risks when water and sanitation services are absent, unsatisfactory, or improperly managed.
Leaders can use key performance indicators to improve quality of life and make decisions based on the results. Some KPIs, which they can consider are:
# Initiatives to promote greater environmental responsibility
# Water recycled and reused
% Current projects that are environmentally friendly
% Waste reused, recovered, or recycled
By monitoring the energy-related KPIs, community leaders can see if they can satisfy the needs of citizens, using only renewable energy resources. Additionally, KPIs such as # Initiatives promoting greater environmental responsibility and % Current environmentally friendly projects help raise environmental protection awareness.
To advance your knowledge and skills among professionals in identifying most effective KPIs for your organization and its use in measuring performance, be a Certified KPI Professional and Practitioner. The certification in KPI Measurement courses of The KPI Institute are designed to help practitioners understand the KPI measurement challenges and ways to address them. Invite your colleagues and enroll now! For further information, visit kpiinstitute.org.
Sell the mobility, not the vehicle! Sell the light, not the lamp! Sell the cooling, not the AC!
In a continuously changing market with intense competitiveness and constant shifts in the customer’s behavior, traditional manufacturers have to keep adapting and innovating to maintain their positions.
An innovative business strategy that shifts the traditional way of doing business is servitization, a process through which the producers go from a product based model to a Product-Service System (PSS). Companies are no longer producing and selling products alone. They are selling services, integrated solutions, and an overall greater experience for the end consumer.
According to Miying Yang and Steve Evans’ study on “product-service system business model archetypes and sustainability,” a generally agreed-upon way to classify the PSS is to include it in one of the following models:
Product-Oriented – when the provider sells the product that ends in the buyer’s ownership. Other services such as consultancy or maintenance can be sold.
Use-Oriented – when a business provides customers with the utility of a product while keeping its ownership. Examples are renting or leasing.
Result-Oriented – when the company sells the results of a product or the value being delivered to the customer. The customer only buying the consumed light instead of lighting products is a relevant example of this typology.
To remain relevant in an always-evolving environment, companies should seize every opportunity to enhance their performance and obtain competitive advantages. Servitization is a win-win model benefiting all the involved parties that’s why an increasing number of businesses are approaching it.
Competing through advanced services is, first of all, an opportunity for growth and profitability as the revenue streams are more diverse. By offering complimentary ongoing services, the income gates certain stability due to recurring and incremental revenue streams.
The relations with the clients are strengthened as their satisfaction is increasing and their loyalty is drive-up. Greater alignment with the customer needs facilitates a long-term relationship and a better relationship with the customers means higher barriers to competition.
Using a servitization model can become an important source of insights for further innovation because providers are still connected to their service which eases the detection of improvements and can spark ideas for new services. Additionally, services are more labor-dependent and less visible which makes them more challenging to replicate and become a sustainable source of competitive advantage.
With all the above benefits also come challenges that companies face in their process to adopt servitization. The biggest problem results from the aversion to change. Old habits die hard while shifting towards servitization requires fundamental changes in the way companies are doing business, affecting every aspect from the strategic approach to everyday operations.
It is a time-consuming transition that needs to be done gradually to avoid putting pressure on the enterprise’s resources. Also, it requires adjustments in the existing capabilities, new technologies need to be deployed to support the services offered, and the employees need to develop related competencies. Customers’ perception is another challenge that companies face, as clients may be reluctant to adopt an unfamiliar servitized solution.
Selling Performance: Pay-per-lux and Power by the Hour
Philips Lighting, currently activating as Signify launched the ‘Pay-per-lux’ model, a ‘lighting-as-a-service’ offer for its customers. Signify handles the entire lighting service – design, installation, maintenance, and upgrades while the customers pay a monthly service fee for light. The program considers circular principles and uses advanced technologies like AI and the Internet of Things.In this model, Signify keeps the ownership of the lighting systems and offers a five-year performance contract, which is based on a series of key performance indicators such as light level, uptime, and energy savings.
The solution was first deployed for the National Union of Students from the United Kingdom. Signify is responsible for the lighting system for 15 years, while NUS pays a quarterly fee. As a result, the energy costs have been minimized while the technologies used are continuously updated, and annual checks are done to assess the system’s health and prevent maintenance.
Rolls-Royce manufactures engines for the aviation industry and implements a servitization model named Power by the hour through which customers have access to a service package by a dollar-per-flying-hour payment mechanism. CareServices solution offers a variety of services to customers such as engine monitoring to predict potential maintenance problems and ensure the aircraft is ready to fly on time, efficiency services to balance the low fuel consumption with optimized flight operations, asset and safety management solutions, in addition to world-class customer support.
The most recent service agreement has been signed with South Korean airline T’way Air. It will benefit from a service concept based on predictability and reliability that will secure the cost of operating, maintaining, and enhancing aircraft availability.
To sum up, there are many other companies from different industries that are moving their focus towards servitization. Even though it is not shielded from risk, the model can create significant benefits in relation to resource efficiency, growth, customer relationship, resilience, and impact on competitiveness. For a traditional manufacturer, a gradual transition from product commercialization to a servitize offering can become a decisive factor in its long-term sustainability.
To ensure a smoother transition from the traditional way of doing business to servitization, join the Certified Strategy and Business Planning Professional course offered by The KPI Institute. Develop the right plan and strategy for your business in achieving servitization. For further details, visit kpiinstitute.org.
In an interview with The KPI Institute (TKI) Publishing Team, Ihab Ibrahim Mohamed Alsakkti, a Strategy and Performance Manager at Alkifah Contracting Company, shares his insights and expertise in organizational performance management for the next issue of Performance Magazine – Print Edition.
On the one hand, investing in sustainability is no longer a nice-to-have strategy. But it is absolutely a need-to-have strategy to ensure compliance with governmental and regulatory requirements.
Here is an excerpt of the interview, where Ihab highlights the effect of sustainability in strategy planning and performance management.
Competency-based education (CBE), according to the non-profit organization EDUCAUSE, enables students to advance their development based on their learning capacity, skills acquisition, or competency improvement at their own pace. This learning journey could happen in almost all types of environments.
CBE creates opportunities for learners and employees to nurture integrated performance-oriented capacities that can help them handle different challenges. This strategy is designed to accommodate various learning styles and can result in more efficient learner outcomes.
CBE would not work well without high-quality trainer’s training. Trainer’s preparation is a critical component of successful CBE deployment. Trainers must learn how to assess learners and tailor learning experiences to their needs. They must have a thorough understanding of the CBE process, techniques for tailoring learning experiences, mastery-based assessment, and the critical role of technology in learning customization.
Developing competencies standards is a crucial part of CBE. It helps sustain skills at the enterprise level by defining an ideal competent performance to measure a worker’s actual performance. The competency criteria can be tailored to a specific country’s setting and confirmed through a local method. TheILO (2021) recommends considering the following factors when creating a local validation strategy:
The industry’s size and geographic dispersion (so representative businesses can participate)
The industry’s diversity (i.e., the technology utilized and the products produced)
The worker’s profile (to guarantee that all competencies are included)
Validation costs and validation time
They must be aware of the differences between CBE and traditional education (TE) while developing competency maps, assessment goals, learning speed, grading, and promotion. They must also understand the importance of assessment in adapting training.
CBE in Healthcare
Healthcare institutions and organizations are being confronted with a number of challenges, including developing clinical approaches and a scarcity of resources. On the other hand, healthcare providers are expected to use care skills effectively and put theoretical knowledge into practice (Eijkenaar et al., 2013; Goudreau et al., 2015). However, a growing amount of research from several countries demonstrates that the clinical performance of healthcare systems is not up to par (Eijkenaar et al., 2013).
Below is a case study demonstrating how CBE works, its effectiveness, and its application to professional practice. It includes a population of physicians, nurses, medical students (residents or interns), and nursing students. CBE courses were offered to improve the clinical performance of medical and nursing students, physicians, and nurses. Traditional education was provided to the control group, and the clinical performance of the study population was the outcome.
Thestudy “The effect of competency-based education on clinical performance of health-care providers: A systematic review and meta-analysis” aimed to evaluate the influence of competency-based education on the clinical performance of healthcare providers. The study takes into consideration the need to develop an intervention to improve the clinical performance of healthcare providers.
The criteria for inclusion were clinical or quasi-experimental trials; physician/nurse or medical/nurse participants; an age range of 18–65 years; adoption of the CBE approach; measurement of clinical performance of the participants using concrete tools of performance assessment; presentation of the results quantitative scoring; and the use of traditional teaching methods for the control group. The exclusion criteria are the use of a combination of CBE and other educational modalities, the lack of a control group, and the measuring of the participants’ theoretical knowledge or non-clinical abilities.
The study used six international electronic databases: PubMed, Ovid, Cochrane Library, Web of Science, ProQuest, Scopus, and Google Scholar. The national electronic databases IranMedex and SID were also used to conduct a systematic review and meta-analysis. In addition, the study comprised other studies that were related to the research goals. The Cochrane Collaboration’s Risk of Bias Tool was applied to assess the studies’ quality.
According to the random-effects model, CBE could improve the clinical performance of health care professionals in the intervention group compared to the control group (SMD = 2.717, 95 percent CI: 3.722 to 1.712).
Competency-based education can help health care practitioners improve their clinical performance. Meanwhile, high turnover rates, decreased job satisfaction, increased presenteeism, poor patient safety, and increased medical errors are consequences of a lack of clinical skills and competencies
Catalyzing teamwork and supporting people to work towards the company’s vision is very important. Having a common belief among people inside the company is what needs to be established first. The beliefs of people refer to their values.
Values serve as the guiding principles of the organization. They need to be set not only by managements’ input but also by employees who will need to comply. IBM CEO Sam Palmisano has done this when he was leading a change from a mainframe maker to a robust provider of integrated hardware, networking, and software solutions back in 2002.
Samproposed three (3) value statements: commitment to the customer, excellence through innovation, and integrity that earns trust, which then changed as per input from the workforce and after being shared with employees to comment on. However, this is not the end of the story. Collaborative effort to set the values is one side of the coin. Believing in them and steering the company forward through these values is the second side that compliments the first side. The new agreed-upon values are dedication to every client’s success, an innovation that matters for our company and for the world, and trust and personal responsibility in all relationships (Paul Hemp and Thomas A. Stewart 2004).
Teamwork is always a key to change. Creating the right team that evolves and gets bigger along the process of change is important. Putting together the ideal team creates the needed collaboration and energy to change. It can start with a few numbers of people and eventuallygets bigger. While there are tools that can create harmony between team members, ensuring they all follow the same direction to the desired change is crucial to success.
Creating harmony among teams and team members involved in the change is important to minimize resistance. Resistors are everywhere and can be created at any time. They exist due to the fear of change, not understanding the big picture, and how they will fit in. This is where leaders of companies and leaders of change teams need to create the urgency to continue. Even if achievement was gained, it still needs to be reflected in other areas of the organization.Change needs to be absorbed by the culture to maintain and sustain its outcome.Sustainability can’t be achieved in short periods. It requires continuous efforts to build harmony among organizations on any achievement andto introduce sustainable practices gradually into the surrounding environment. (John P. Kotter 1995).
Attitude and behaviors of employees are important to keep at high levels during any change. To steer this positively, employees need to be the ones who acknowledge the small changes related to a big change in place. They need to share their perceptions of how things are being led and how this is resulting in new consequences that can relate to a big change.
Employees are the ones who are executing the change. To acknowledge this and empower it, leaders need to listen to employees and use their perceptions and insights as valuable input to make any modifications to the plan for change (Ron Carucci 2019). Getting the buy-in from employees means that they need to be part of setting the actions forward and developing the change plan. Asking “how can we do this?” and “how they can contribute to this?” or “how they can support us in this?” is crucial to bring people into one group feeling empowered, cared for, and letting employees be convinced that their leaders truly believe in them. No change can happen without such an important asset which is the employees (Harvard Management Update 2008).
Creating a common purpose for employees and driving them forward with hope is essential for value-based management. Motivating them to realize the need to change leads to more agility and the achievement of objectives (Paul Hemp and Thomas A. Stewart 2004). Motivating employees to be part of a change is not easy, especially if there were previous attempts for change that have either stopped or failed. Failed attempts at change can cause employees not to trust any new change or choose not to be part of it. Employees can even not put forward all their potential during a change if they are not motivated. Therefore, it’s important to build employees’ resilience to change and maintain it along the way. Keep them part of the developments and achievements and share successes with them (Ron Carucci 2019).
Conclusion
Change is part of any business now. Leading it efficiently and effectively is needed to sustain the business. Proper leadership enables organizations to tackle the external factors affecting business anywhere in the world while building on internal capabilities, assets, and employees. Leading change requires leaders to work hand in hand with their employees. Working as a team is a game-changer to handle the different details and aspects of the change and transformation in their businesses. This can be done by strengthening the teamwork between employees, team members of the change team, and departments to eliminate silos. Working as a team also develops a collaborative environment between everyone.
Leading change is always aligned with value creation. We always look at the value of what is being delivered to customers. We also need to understand that value goes through different stages to be created. This chain of stages needs to be supported by having a clear guiding principle shared among all employees and having leaders talk the walk and walk the talk to be the role models for their teams.
Communication is another aspect that is very important for leading change. It needs to be well managed and executed to ensure it is done properly. Effective communication in leading change gets the needed buy-in from everyone while also keeping them all in the loop of achievements, success, and progress. This will support building the needed motivation among employees who are executing the change. While employees know they will not be put aside but referred to and considered by their leaders, organizations should empower their members to share perceptions and ideas continuously to ensure the success of the change journey.
They say excellence and changes are also a journey that does not end by achieving the result of a new change. But they will require continuous efforts to embed this change in the business’ working environment and daily operations to ensure sustainability and reflection on customers and financial numbers.
To widen your knowledge about defining your organization’s strategy in times of change, establishing appropriate customer trust, and creating the right balance between team members, visit The KPI Institute’s website and sign up for Certified Strategy and Business Planning Professional Live Online Course.
In an interview with The KPI Institute (TKI) Publishing Team
