Organizations typically focus on Customer-centric Design in their Strategic Planning and overlook the critical driver of Performance, Growth, and Operational Excellence—their employees. With cut-throat competition now the norm the realization has become clearer that employees are: The face of the business and create lasting—or perishing—brand impression. Sources of innovation and organizational knowledge. Representation of the [...]
Organizations typically focus on Customer-centric Design in their Strategic Planning and overlook the critical driver of Performance, Growth, and Operational Excellence—their employees. With cut-throat competition now the norm the realization has become clearer that employees are:
- The face of the business and create lasting—or perishing—brand impression.
- Sources of innovation and organizational knowledge.
- Representation of the company’s service philosophy.
- Expected to live by its Organizational Culture and values.
Employee Engagement has emerged as one of the significant pillars on which the Competitive Advantage, Productivity, and Growth of an organization rests. What, exactly, does it mean when an employee is engaged? Employee Engagement, over the years, has been thought of in terms of:
- Personal engagement with the organization.
- Focus on performance of assigned work.
- Worker burnout.
- Basic needs (meaningful work, safe workplace, abundant resources).
- Attention on Cognitive, Emotional and Behavioral components related to an individual’s performance.
Although Employee Engagement is widely seen as an important concept, there has been little consensus on its definition or its components either in business or in the academic literature.
Kumar and Pansari’s 2015 study define Employee Engagement as:
“a multidimensional construct that comprises all of the different facets of the attitudes and behaviors of employees towards the organization”.
The multidimensional construct of Employee Engagement has been synthesized into the following 5 components (or dimensions).
- Employee Satisfaction
- Employee Identification
- Employee Commitment
- Employee Loyalty
- Employee Performance
The 5 dimensions of Employee Engagement have been found to have a direct correlation with high profitability, as substantiated by a number of research studies:
For instance, a study of 30 companies in the airline, telecom and hotel industries shows a close relationship between Employee Engagement and growth in profits. After controlling other relevant factors—i.e., GDP level, marketing costs, nature of business, and type of goods, the study found:
- Highest profitability growth—10% to 15%—in companies with highly engaged employees.
- Lowest level of profitability growth—0% to 1%—in companies with disengaged employees.
Research reveals that Employee Engagement affects 9 performance outcomes; including Customer Ratings, Profitability, Productivity, Safety Incidents, Shrinkage (theft), Absenteeism, Patient Safety Incidents, Quality (Defects), and Turnover.
The differences in performance between engaged and actively disengaged work units revealed:
- Top half Employee Engagement scores nearly doubled the odds of success compared with those in the bottom half.
- Companies with engaged workforces have higher earnings per share (EPS).
These 5 dimensions become the base for measuring Employee Engagement in a meaningful manner that permits managers to identify areas of improvement. To assess an organization’s current status of Employee Engagement, a measurement system is needed that includes:
- Metrics for each component of Employee Engagement.
- A scale for scoring metrics in each component.
- A comprehensive scorecard that pulls everything together.
Let us delve a little deeper into the first 2 dimensions of Employee Engagement.
Employee Satisfaction is the positive reaction employees have to their overall job circumstances, including their supervisors, pay and coworkers.
When employees are satisfied, they tend to be:
- Committed to their work.
- Less absent and more productive in terms of quality of goods and services.
- Connected with the organization’s values and goals.
- Perceptive about being a part of the organization.
The 5 metrics that gauge Employee Engagement in terms of Employee Satisfaction include:
- Receiving recognition for a job.
- Feeling close to people at work.
- Feeling good about working at the organization.
- Feeling secure about the job.
- Believing that the management is concerned about employees.
We take a look at another dimension central in significance.
Signifies what motivates the employees to do more than what’s in their job descriptions.
Employee Commitment is much higher for the employees who identify with the organization. This element:
- Develops over time and is an outcome of shared experiences.
- Is often an antecedent of loyalty.
- Induces employees to guard the organization’s secrets.
- Pushes employees to work for organization’s best interests.
Research has found that employees with the highest levels of commitment:
- Perform 20% better.
- Are 87% less likely to leave the organization.
The 3 metrics that gauge the Employee Commitment dimension of Employee Engagement include:
- Commitment to deliver the brand promise along with knowledge of the brand.
- Very committed to delivering the brand promise.
- Feels like the organization has a great deal of personal meaning.
Interested in learning more about these foundational pillars to Employee Engagement? You can download an editable PowerPoint on 5 Dimensions of Employee Engagement here on the Flevy documents marketplace.
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Traditional Talent Management practices fail to meet the high-potential talent requirements imperative to compete in the digital world today. In fact, they disappoint the key talent available in the market. A 2016 Digital Business research by MIT Sloan Management Review and Deloitte on 3700+ executives reveals attracting and retaining talent as the most pressing concern [...]
Traditional Talent Management practices fail to meet the high-potential talent requirements imperative to compete in the digital world today. In fact, they disappoint the key talent available in the market.
A 2016 Digital Business research by MIT Sloan Management Review and Deloitte on 3700+ executives reveals attracting and retaining talent as the most pressing concern for organizations large or small. The study indicates that organizations that are still using traditional approaches to manage Talent face a number of pressing challenges, including:
- Building new competencies within limited resources.
- Alignment of culture, strategic initiatives, human capital, and hierarchies with organizational objectives.
- Attracting, selecting, and retaining key talent.
- Creating robust Performance Management, compensation, and benefits systems.
- Finding and developing talent with critical capabilities—such as forward thinking, transformative vision, and change focus—alongside technical skills.
- Providing opportunities that require digital skills, to attract and keep critical Talent engaged in the organization.
One of the findings of the 2016 digital business study demonstrate that it’s both the younger as well as middle management people who tend to look elsewhere in case they don’t find opportunities to develop digital skills in their existing organizations. Such results call for senior management to identify, evaluate, and implement more immediate and appropriate digital technologies methods to attract and retain key talent. Leading organizations are now incorporating these Talent Transformation efforts into their Digital Transformation programs.
Research on 3700 plus Digital-native respondents further reveals leading organizations to be using a combination of 2 distinct models to manage their Talent:
- Talent Markets for Contractors
- Digital Tools for Employees
Let’s discuss the first approach to Talent Management in detail, for now.
Talent Markets for Contractors
Acquisition of right talent necessitates fostering linkages with on-demand talent markets for the timely availability of required talent. Many organizations seek help from on-demand Talent Markets to attract and sustain talent in the digital business environment. These organizations pursue a flexible recruitment model using digital platforms to attract skilled contractors and consultants. Digital talent markets can be expanded or contracted depending on the quantity of work and skillsets required.
Digital talent markets can coordinate the work of full-time employees as well as cover live activities of contractors more nimbly and reliably. Digital platforms offer superior talent markets to assess and manage large talent pool of contractors. A few organizations are experimenting with developing their own on-demand talent markets while some have cooperated with other organizations to share talent markets. It’s up to senior management to decide if they want to leverage existing on-demand talent markets or cultivate their own to ensure availability of required skills when needed. Talent markets can be nurtured using 3 best practices:
- Manage on-demand talent markets as a community
- Strike a balance between full-time and part-time talent
- Create an environment where the best people want to work
Manage on-demand talent markets as a community
To make the availability of required key talent certain:
- On-demand talent markets should be considered strategic resources and cultivated carefully with future talent requirements in mind.
- Companies should devote resources and efforts to develop their own talent pool.
Strike a balance between full-time and part-time talent
Talent markets are meant to manage freelancers. However, a few organizations have also begun collaborating with them and deploying their full-time employees to project work that is critical to build new competences. A few considerations in this regard include:
- Companies need to strike an equilibrium between full-time and part-time talent.
- Some people prefer full-time employment while others fancy flexibility or work from home options.
- Some workforce providers even offer services of retired people with expert skills, who have proved to be a valuable asset.
- Firms can choose on-demand workforce providers to have full-time employees to maintain a steady employee base, or pick part-time contractors to handle workload surges.
Create an environment where the best people want to work
Setting up the right environment is central to attracting and retaining the best flexible, on-demand talent. A majority of companies consider freelancers or independent contractors inferior to their permanent employees. Organizations that want to attract great talent should think of contractors as valuable resources and treat them as such. To get top talent, organizations need to:
- Nurture an Organizational Culture conducive to support on-demand workers.
- Devise remuneration and reward systems that value contractors and full-time employees equally.
- Create an atmosphere that offers attractive work experiences for the employees.
- Deploy people on interesting projects and allow them to experience job rotations to improve their skills sets, problem solving abilities, cross-departmental team collaboration, and improve their engagement levels.
Interested in learning more about the 2 distinct approaches to Talent Management through Digital Transformation? You can download an editable PowerPoint on Digital Transformation: Talent Management here on the Flevy documents marketplace.
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Enterprises worldwide face problems selecting, staffing, developing, compensating, motivating, and sustaining their key talent. Building a sustainable Talent pipeline is quite strenuous even for large multinationals. Replicating best practices from somewhere and applying them alone isn’t sufficient for organizations to build a Talent pipeline and achieve Competitive Advantage. This warrants overcoming arduous challenges associated with [...]
Enterprises worldwide face problems selecting, staffing, developing, compensating, motivating, and sustaining their key talent. Building a sustainable Talent pipeline is quite strenuous even for large multinationals.
Replicating best practices from somewhere and applying them alone isn’t sufficient for organizations to build a Talent pipeline and achieve Competitive Advantage. This warrants overcoming arduous challenges associated with this digital age, including:
- Adjusting to varying dynamics in global markets
- Handling the expectations of varied customer segments in different geographies
- Managing the preferences of key Talent
- Acquiring new technologies
- Building novel capabilities
- Achieving Operational Excellence by streamlining operations and improving processes
- Exploring new markets
- Devising strategies to attract, select, develop, assess, and reward top Talent.
Developing Talent Management practices helps the organizations build and retain talented people available in the job market. The term was first used by McKinsey & Company in 1997, and it pertains to planning and managing strategic Human Capital through activities, i.e. attracting, selecting, developing, evaluating, rewarding, and retaining key people.
Executives use diverse Talent Management strategies and career pathways based on various departments, levels, and roles in their Talent pool. Multi-year research on Talent Management practices conducted by an international team of researchers from INSEAD, Cornell, Cambridge, and Tillburg universities studied 33 multi-national corporations, headquartered in 11 countries. The study revealed that successful Human Capital practitioners and workforce planners adopted 6 core principles. These principles act as the 6 pillars to effective Talent Management implementation:
- Alignment with Corporate Strategy
- Consistency of Talent Management Practices
- Integration with Corporate Culture
- Involvement of Leadership
- Global Strategy with Localization
- Branding and Differentiation
Let’s discuss the first 3 pillars in detail, for now.
Alignment with Corporate Strategy
Integrating Talent Management with Corporate Strategy is imperative as the need for future Talent depends on the company’s long-term strategy. Corporate Strategy should guide the identification of Talent required to accomplish organizational goals, since it’s the right Talent that drives the key strategic initiatives rather than strategic planning.
For example, GE’s Talent Management practices have been a great assistance in implementing their strategic initiatives. The organization regards its Talent Management system as their most potent execution tool and has integrated TM processes into their strategic planning process. To sustain its image as an innovation leader, GE targets technical skills as a priority in its annual Strategic Planning sessions. Individual business units lay out their business as well as the Human Capital objectives in GE’s annual strategic planning sessions. Significant time is spent on reviewing its Innovation pipeline, its engineering function’s structure, and Talent requirements. To achieve its vision, GE promotes more engineers in its senior management than its rivals.
Consistency of Talent Management Practices
Talent Management practices must be consistent and synchronous with each other. It is critical not only to invest in advancing the careers of key Talent but also to invest in processes to empower, compensate, and retain them. Human Capital practitioners utilize various tools to ensure consistency of Talent Management practices, including Human Resources satisfaction surveys and qualitative and quantitative data on TM practices implementation.
For example, the success of Siemens is based on consistent monitoring of its systems, processes, and key performance metrics across its subsidiaries. Every element of Human Capital Management is connected, continuously assessed, and linked to rewards. This goes from recruitment of graduates each year, to their orientation, to mentoring and development, to performance evaluation and management, and compensation and benefits.
Integration with Corporate Culture
Corporate culture is regarded as important as vision and mission by renowned global organizations. These companies hold their core values and behavioral standards very high and promote them among their employees through coaching and mentoring. They strive to embed this into their hiring, leadership development, performance management, remuneration, and reward processes / programs. So much so that they consider cultural adaptability a crucial element of their recruitment process—as personality traits and mindsets are hard to develop than technical skills—and evaluate applicants’ behaviors and values rigorously.
For example, among other leading companies, IBM has a special emphasis on values while selecting and promoting people. To ensure consistent values across the board, it organizes regular values jam sessions and employee health index surveys. These sessions encourage open communication and debate on values and organizational culture and their importance among employees.
Interested in learning more about the other pillars of Talent Management, the various approaches to TM? You can download an editable PowerPoint on 6 Pillars of Talent Management here on the Flevy documents marketplace.
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VUCA relates to threats that people and enterprises often encounter. The acronym reflects the constant, dramatically-transforming, and unpredictable world. The concept originated in 1987, based on the theories of Warren Bennis and Burt Nanus. The term was first used by U.S. Army War College to describe the volatile, uncertain, complex, and ambiguous general conditions globally. [...]
VUCA relates to threats that people and enterprises often encounter. The acronym reflects the constant, dramatically-transforming, and unpredictable world. The concept originated in 1987, based on the theories of Warren Bennis and Burt Nanus. The term was first used by U.S. Army War College to describe the volatile, uncertain, complex, and ambiguous general conditions globally.
The acronym found traction after 2002, when it was considered an emerging idea to be discussed among the strategic leadership. The term VUCA stands for:
The 4 VUCA challenges reflect the unpredictable forces of change that affect organizations, necessitating new skills, approaches, and behaviors to mitigate them. The 4 elements of VUCA relate to how people view the situations where they make decisions, formulate plans, respond to challenges, cultivate change, and solve issues.
VUCA is a practical code for anticipation, understanding, preparedness, and intervention in the wake of uncertainty and confusion. One of the biggest challenges of managing in a VUCA world involves team members who resist change. Simply training the leaders on key capabilities isn’t adequate to avoid failures resulting due to not handling the VUCA issues properly. What differentiates sound Leadership from mediocre management is the leaders’ ability to ascertain key elements that prevent them from adopting resilience and flexibility.
In this age of disruption, Volatility, Uncertainty, Complexity, and Ambiguity are widespread. These elements will be more prevalent across industries and enterprises in future, and if not managed properly can sap an organization’s and its employees’ strengths.
Let’s discuss these VUCA elements individually.
The Volatility element of VUCA talks about the distinct situational categorization of people due to their specific traits or their reactions in particular situations. People react differently in specific settings due to social cues. Volatility describes the influence of situations on stereotypes and social categorization, which is the reason why people perceive others differently.
Two factors connect people to their social identities: Normative fit and Comparative Fit. Normative fit is the degree that a person relates to the stereotypes and norms that others associate with their specific identity. For example, a Hispanic woman cleaning a house does not get gender stereotypes from others in this situation, but when she eats an enchilada ethnic stereotypes emerge and the gender is forgotten. Comparative fit relates to specific traits of a person that are prominent in certain states compared to others, which are obvious as others around a person do not have those traits. For example, a woman in a room full of men stands out, whereas all the men are grouped together.
The Uncertainty element of VUCA pertains to the unpredictability of information in events, which often occurs in the intention to indicate correlation between events. Uncertainty is often counteracted by using social categorization (stereotypes), as people tend to engage in social categorization when there isn’t much data about an event.
For instance, when there isn’t enough information to clearly appreciate someone’s gender—as in case of an author’s name when discussing written information—majority of people presume the author is a male. Social categorization also occurs in case of a race, when people stereotype a certain race to a particular trait. For example, basketball players are most of the time assumed as black people while golfers are expected to be white.
The Complexity element of VUCA relates to the inter-relatedness of several factors in a system. Complexities due to interactions and dependencies within groups and categories bring unexpected results even in a controlled environment. There are certain identities in individuals that are more dominant than others. Other people distinguish these identities, make their assumptions about them, and create stereotypes. However, complexity in a person’s personality makes it difficult to socially categorize that individual accurately.
Different categories trigger in the mind of the observer, creating positive and negative perception. It is that positive perception that the observer is more open-minded despite stereotypes and think past the target’s dominant social trait. Complexities in social identities cause some identities to lessen the noticeability of other identities, making the targets unnoticeable and overlooked.
Interested in learning more about the elements of a VUCA environment, its mitigation, and Robert Johansen’s leadership framework “VUCA Counterweight” or “VUCA PRIME?” You can download an editable PowerPoint on VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) here on the Flevy documents marketplace.
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Strategy and execution are the 2 critical elements that drive a business. However, leaders often struggle even with defining—let alone devising and executing—an effective strategy. Many of those who are responsible to deal with it fall short of describing how they typically employ it. This failure takes its roots from the fact that there is no [...]
Strategy and execution are the 2 critical elements that drive a business. However, leaders often struggle even with defining—let alone devising and executing—an effective strategy. Many of those who are responsible to deal with it fall short of describing how they typically employ it. This failure takes its roots from the fact that there is no clear path associated with strategy.
Strategy is about making sound decisions about unforeseen problems. It’s about selecting the right options—about matters that are often quite ambiguous today but have great significance in the future—based on thorough contemplation, detailed analysis, and creative ideas. Broadly speaking, strategy encompasses these 3 main elements:
- A vision and direction
- A certain position or pattern
- A deliberated Strategic Plan to achieve strategic goals and vision
Great strategists execute their plans, analyze the results, evaluate their actions, and perform course correction based on the outcomes. They are not afraid of even revamping their approach entirely. Senior leaders should clarify their understanding of the concept of strategy and draw attention to the importance of differentiating between the 3 distinct types of strategies before formulating their own course of action:
- General Strategy
- Corporate Strategy
- Competitive Strategy
Let’s delve deeper into the 3 types of strategy.
General Strategy indicates how a specific objective will be achieved, with well-thought-out plans. The focus of this type of Strategy is on ends (objectives and results) and means (the resources we have to achieve the objectives). Strategy and tactics combined bridge the gap between ends and means; where Strategy deals with deploying the resources at our disposal while tactics govern their utilization. A pattern of decisions and actions marks progress from the starting point to achievement of objectives in General Strategy.
Senior executives need to deliberate on the following questions before devising their General Strategy:
- What do we do?
- Why are we here?
- What kind of business are we?
- What kind of business do we want to become?
- What is our purpose? What are the results we seek?
- What is our existing Strategy, is it explicit or tacit?
- What Strategy and plans may bring about the results we want?
- What resources we have at our disposal?
- Are there any constraints in terms of resources that limit our actions?
Corporate Strategy describes what a company does, the purpose of its existence, and what it aims to become. Corporate Strategy focuses on choices and commitments concerning the markets, business, and the organization. Corporate Strategy classifies the markets and the businesses in which a company will operate. This type of strategy is typically decided in the context of defining the company’s mission and vision.
A detailed assessment of the existing strategy, market, competition and environment is critical for devising the Corporate Strategy. Strategists indicate that there are critical elements that should be factored in while formulating Corporate Strategy. These elements include product or service offerings, resources, marketing and sales approaches, manufacturing capabilities / capacity, customers, distribution channels, technology, type of market and its requirements, and revenue and profit goals.
While formulating Corporate Strategy, senior executives should consider and seek answers to the following questions:
- What is our existing Corporate Strategy?
- Is our Corporate Strategy explicit or tacit?
- What are the critical assumptions that make our existing strategy viable?
- What is going on in the market—in terms of social, political, technical and financial environment?
- What do we seek to accomplish in terms of our growth, size, and profitability targets?
- What markets we are eyeing to compete in?
- What businesses we intend to operate in?
- What locations and geographies will we compete in?
Competitive or Business Strategy specifies for an enterprise the core reason on which it contests its rivals. It depends on an organization’s competences, advantages, and disadvantages compared to the market and the rivals.
Interested in learning more about the General, Corporate, and Competitive Strategies? You can download an editable PowerPoint on The 3 Distinctions of Strategy here on the Flevy documents marketplace.
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Manufacturing today entails immediate yet informed decision making. However, with increasing levels of sophistication and production, senior leadership often has limited time to make optimum decisions pertaining to the number of unanticipated issues surfacing from time to time. These issues—if not managed properly and timely—can lead to defects and wastes. Top global enterprises are utilizing [...]
Manufacturing today entails immediate yet informed decision making. However, with increasing levels of sophistication and production, senior leadership often has limited time to make optimum decisions pertaining to the number of unanticipated issues surfacing from time to time. These issues—if not managed properly and timely—can lead to defects and wastes.
Top global enterprises are utilizing innovation and creative ways to enable prompt decision making. Specifically, they are using Internet of Things (IoT) to effectively handle critical aspects of manufacturing. Successful implementation of a Manufacturing IoT system facilitates in automating key tasks, decisions and processes; curtailing scrap and rework; and enhancing productivity.
People often object to implementing an IoT system by citing other important projects that they are already undertaking and the resource and time constraints as pressing hurdles. To work around these limitations, manufacturers can engage 3rd party consultants having proven expertise in end-to-end successful IoT, Asset Tracking, and manufacturing systems deployment.
Implementing a Manufacturing IoT System leverages immense benefits, including:
- Enhancing the ROI of other programs under way.
- Streamlined and Process Improvement and Robotic Process Automation help prompt informed decisions.
- Managing materials efficiently.
- Adjusting to customer requirements.
- Avoiding costly mistakes and rework.
However, harnessing IoT necessitates careful deliberation and planning. The core requirements to effectively implement a Manufacturing IoT system can be segregated into 2 broad categories:
- Functional Requirements
- System Requirements
Functional Requirements (FR) describe the system or its components. FR provide a description of services that the Manufacturing IoT system must offer. FR for Manufacturing IoT may include:
- Control Assets and Administer Asset Properties
- Track Assets Movement
- Setup Locations
- Maintain Equipment Duty Cycles for Maintenance
- Record Raw Material Shelf Life
- Maintain Asset Family and Digital Thread
- Extend Material Shelf Life
- Enable Cutting and Kitting
- Asset Search and Filter
- Maintain Assets Events
- Record History of Events
- Generate New Assets
- Record Cured Kits
- Document Assets
- Allow Synchronization with Current Systems
- Generate Real-time Production Maps
- Enable Integration with Cut Planning Optimization Systems
- Allow Production of Passive RFID Tags Internally
- Create Customized Alerts
All systems require availability of certain software resources, functionalities, or other hardware components. These prerequisites have to be met in the design of a system. Typical System Requirements for manufacturing IoT may include:
- User Authorization
- Quick installation
- Integration to Next-generation IoT Platforms
- Radio-frequency Identification (RFID) Ability
Let’s delve deeper into some of the Functional Requirements for now.
Control Assets and Administer Asset Properties
The system should be able to manage multiple assets and add new assets. It should be capable of:
- Creating asset properties, e.g., name, ID and shipment date.
- Editing property labels and show / hide asset properties.
- Automatically adding materials’ expiry date, “remaining exposure time,” “tool autoclave cycles left,” and “tool usage time left.”
Trace Assets Movement
The IoT system should be able to:
- Follow assets location from one site to another during the manufacturing process.
- Allow integration of MAT with RFID and other floor sensors to gather real-time assets’ location and condition data.
- Enable asset location reporting manually, through barcode, or hybrid (barcode and RFID).
The system should maintain:
- Asset data from multiple sites (locations).
- Assets movement to and fro various sites, reported using RFID or other sensors.
Maintain Equipment Duty Cycles for Maintenance
The IoT manufacturing system should record all maintenance needs and maintenance activity performed on an asset. Specifically it should:
- Keep data on all tools available at various sites with their duty cycles for preventive maintenance.
- Maintain record and generate reports on maintenance activity preformed on a specific tool.
Record Raw Material Shelf Life
The IoT manufacturing system should:
- Automatically calculate raw material and work in process exposure time and date of expiration.
- Maintain assets’ shelf life and generate automated screen notifications, alerts, emails, or SMS.
Interested in learning more about the details of other Functional and System Requirements of a Manufacturing IoT system? You can download an editable PowerPoint on Manufacturing: Internet of Things Implementation here on the Flevy documents marketplace.
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Changing industry ecosystems and competition today demand from the organizations to undergo strategic shifts. The purpose of a company is undergoing Business Transformation from serving the interest of shareholders to serving all stakeholders that influence the organization. Shareholders are often considered the only stakeholders that invest in a business. Senior management needs to be cognizant [...]
Changing industry ecosystems and competition today demand from the organizations to undergo strategic shifts. The purpose of a company is undergoing Business Transformation from serving the interest of shareholders to serving all stakeholders that influence the organization.
Shareholders are often considered the only stakeholders that invest in a business. Senior management needs to be cognizant of the importance of shareholders as well other stakeholders who create value for the organization. They should work on building a collaborative Organizational Culture and paying heed to the welfare of all those groups that play a role in organizational growth.
This warrants a thorough evaluation of all stakeholders, their long-term interests, and Value Creation—or Value Destruction—potential for the organization. But first, this calls for finding answers to the following key questions:
- Who creates the most value for the organization?
- Who among the stakeholders typically secure the best deals from the organization?
- Who is the victim of having the worst deals from the organization?
- Who among the stakeholders is potentially untrustworthy?
- Are there any intermediaries or stakeholders fulfilling their personal agendas?
Answering these questions is critical for the executives, otherwise they may risk falling into Shareholder Value Traps. Recognizing and understanding stakeholder value traps while the managing stakeholders‘ various interests helps executives achieve shared and individual long-term goals. These 5 common traps prevent stakeholders’ interests to get integrated with the interests of the organization and destroy the value of a company if overlooked:
- Ignoring cash-flow driving stakeholders while distributing cash
- Miscalculating reaction from stakeholders
- Supporting under-performing units
- Conceding to willful vulture capitalists
- Misjudging intermediaries role in transactions
Let’s discuss 3 of these stakeholder traps individually.
TRAP 1 – Ignoring cash-flow driving stakeholders while distributing cash
Shareholders are often treated as the critical drivers of long-term cash flows. However, they are often short-term cash flow generators, whereas other stakeholders who provide their input for the organization in the form of their competencies and experience deliver long-term value. These real contributors should be given top priority when distributing cash on earnings. Underestimating or failure to identify the real long-term cash-flow generators can be a fatal value trap for an organization.
TRAP 2 – Miscalculating reaction from stakeholders
Another trap that most executives fall victim to is discounting potential backlash from weak stakeholders upon unfair distribution of cash / incentives. Mining value from these victims to support shareholder disbursements can be equally detrimental, as annoyed stakeholders—with the help of social media and NGOs—, legal battles, and financial penalties can devastate a firm’s reputation and financial health.
TRAP 3 – Supporting under-performing units
Senior executives and boards at some organizations foster free riders—stakeholders that sap more benefits from the enterprise than the business they generate—at the expense of long-term value shareholders. Free riders include an under-performing department close to the board, or a dwindling business unit that is part of a profitable section and whose financials are not categorized separately.
Continued support to these free riders is often at the cost of allocating resources to other potentially more profitable ventures, and this practice has led many companies to losses and even bankruptcies.
Interested in learning more about the Stakeholder Value Traps, types of organizational stakeholders, and strategies to stay clear of the Stakeholder Value Traps? You can download an editable PowerPoint on Shareholder Value Traps here on the Flevy documents marketplace.
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In the wake of global pandemics when meeting face to face is not possible, it’s about facilitating workshops digitally, designing a formal agenda, and utilizing digital tools to ensure a productive virtual meeting. Digital Collaboration Platforms have been pivotal in the current scenario. As a matter of fact, Digital Collaboration platforms have become a new [...]
In the wake of global pandemics when meeting face to face is not possible, it’s about facilitating workshops digitally, designing a formal agenda, and utilizing digital tools to ensure a productive virtual meeting. Digital Collaboration Platforms have been pivotal in the current scenario.
As a matter of fact, Digital Collaboration platforms have become a new norm and have forever transformed business work environment. Digital Facilitation tools are extensively used by facilitators, Change Management consultants, Organizational Development practitioners, and learning professionals as a way to collaborate on workshops, events, change initiatives, and learning programs.
Digital Workshop Facilitation can be categorized into the following 3 major types:
- Virtual Facilitation
In this type of Digital Facilitation, a group collaborates remotely in real time but from different locations. Common tools used are Zoom, GoToMeeting etc.
- Asynchronous Facilitation
In this facilitation method, a facilitator leads participants remotely at a different time and place. Common tools include Email, Slack etc.
- Face-to-Face Facilitation
In Face-to-Face facilitation, a facilitator interacts with a group of people in the same workshop space, in person. Digital tools can be used in such a setup instead of flip charts and sticky notes.
The new scenario brings forth new challenges in workshop facilitation that necessitate robust principles, methods, and tools for the future work environment to run smoothly. Understanding and adhering to the following best practices and principles in Digital Workshop Facilitation helps in attaining effective results just like face-to-face workshops:
- Specify well-defined guidelines and expectations.
- Form an assured environment to enable discourse.
- Ensure effective interaction before, during, and after a workshop.
- Ensure all voices are heard.
- Document the conversations.
- Alter the moderation approach based on the participants’ level of understanding.
- Seek comments and iterate.
Let us delve a little deeper into some of the principles:
1. Specify well-defined guidelines and expectations.
The remote nature of digital workshops limits the element of reacting to audience’s lack of attention. This warrants clear instructions regarding ground rules, both in writing and orally to compensate for this disadvantage. Participants need to use precise language in asking questions and answering them.
Instructions on technology and tools usage should be reiterated from time to time.
2. Form an assured environment to enable discourse.
Trusting participants in a virtual setting is difficult if you do not know them. It is the digital facilitator’s job to create conversation security in different ways. Spending time on icebreakers or other pre-engagement activities may ease the discomfort. Providing quick and positive feedback to those who actively contribute encourages shy participants and creates a positive environment. Informing the participants on how meetings are being documented and information on who has access to this documentation can reassure participants.
3. Ensure effective interaction before, during, and after a workshop.
Digital Facilitation platform can be used ahead of a meeting to help participants familiarize with each other, disseminate the agenda, initiate discussions, or obtain helpful information from the participants, such as questions, skill levels, ideas, etc. Digital Collaboration Platform should be the center of post-workshop activities, e.g., sharing documents, closing agendas, answering additional queries, and extended discussions.
4. Ensure all voices are heard.
Digital Workshop tools can facilitate participation of people who in a traditional workshop setup will not be able to participate due to dominance by a few individuals.
Interested in learning more about the Digital Workshop Facilitation principles, methods, and tools? You can download an editable PowerPoint on Virtual Work Digital Facilitation (Primer) here on the Flevy documents marketplace.
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Large manufacturers are often reluctant to share knowledge with suppliers. However, supplier networks are considered a great source of gaining competitive edge by Learning Organizations. A Learning Organization is founded on innovation, free flow of ideas, and a consistent focus on transforming the ways of doing business in order to achieve the desired results. For [...]
Large manufacturers are often reluctant to share knowledge with suppliers. However, supplier networks are considered a great source of gaining competitive edge by Learning Organizations.
A Learning Organization is founded on innovation, free flow of ideas, and a consistent focus on transforming the ways of doing business in order to achieve the desired results. For instance, Toyota out-performed its competitors in the 2000s era by incorporating the principles of Learning Organization in its culture and sharing technology and knowledge with its suppliers. This resulted in less defects, lower inventory levels, and improved labor productivity for its suppliers and higher profits for Toyota.
Specifically, Toyota became a Learning Organization by developing the infrastructure and inter-organizational processes that enabled quick and free flow of explicit and tacit knowledge to its supplier network. The Learning Organization at Toyota features 3 inter-organizational processes, which became foundational to its approach to Supply Chain Management:
- Supplier Associations
- Consulting Groups
- Learning Teams
Supplier Associations were setup by Toyota, initially, to share information, valuable experience, and to extract feedback. The knowledge-sharing mechanisms that Toyota’s Supplier Associations employ include high-level sharing of explicit knowledge within the supply network regarding production plans, policies, and market trends. The Supplier Associations hold bimonthly/monthly meetings to discuss key topics that include cost, quality, safety, best practices, and social activities.
These Supplier Associations enable suppliers to build relationships in Toyota at higher levels which was not a common practice in the industry. This resulted in tremendous improvements in supplier performance due to explicit information and experience-sharing, which ultimately benefited Toyota to achieve excellence.
By establishing Consulting Groups in the 1960s, Toyota started the practice of providing free consultation regarding valuable production knowledge to its suppliers through experts. This was accomplished through the creation of Operations Management Consulting Department (OMCD) in Japan in the 1960s and Toyota Supplier Support Center (TSSC) in the U.S. in 1992.
By developing the Consulting Groups infrastructure, Toyota’ consultants spent significant time at their supplier sites free of charge, helping them resolve problems in the Toyota Production System (TPS) implementation. Suppliers, in turn, were encouraged to share their project results and open their operations to one another. This explicit sharing of results and knowledge enabled other suppliers to replicate best practices and benefited Toyota by negotiating Target Pricing with its suppliers.
Learning Teams—the 3rd pillar of a Learning Organization—were pioneered by Toyota in 1977 by organizing its suppliers into Voluntary Study Groups in Japan or Plant Development Activity (PDA) groups in the U.S. The Learning Team collaborated voluntarily on production and quality management.
The Learning Teams were—and still are—responsible for determining a theme and spending time addressing each member’s problems related to that theme, making the members learn significantly by having outside pair of eyes look at their problems. This helped Toyota’s suppliers’ network achieve effective tacit knowledge transfer, explore new ideas and applications of Toyota Production System (TPS), transfer valuable lessons learnt to all stakeholders, and enhance production quality.
Toyota follows a deliberate step-wise path to create Knowledge-Sharing Networks. These Knowledge-Sharing Networks are an invaluable resource for enhancing both overt and implicit information and experiences for the organization.
Key dynamics of Toyota’s Knowledge-Sharing Networks involve creating a non-threatening one-on-one relationship with suppliers through the Suppliers Association in the form of financial as well as valuable knowledge-sharing assistance.
Interested in learning more about the dynamics of Toyota’s Knowledge-Sharing Networks, the fundamental barriers to learning, and their implications on the suppliers and the manufacturer? You can download an editable PowerPoint on Learning Organization: Supplier Networks here on the Flevy documents marketplace.
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In the modern age, organizations are striving to form a sustainable Supply Chain system to cope with the challenges that are arising. Such issues include the emission of hazardous substances, excessive resource consumption, Supply Chain risks, and complex procedures. Through Strategic Planning, organizations around the globe are adopting strategies to become a sustainable organization. In [...]
In the modern age, organizations are striving to form a sustainable Supply Chain system to cope with the challenges that are arising. Such issues include the emission of hazardous substances, excessive resource consumption, Supply Chain risks, and complex procedures.
Through Strategic Planning, organizations around the globe are adopting strategies to become a sustainable organization. In fact, there is an increasing trend towards organizations adopting sustainable Supply Chain Management practices.
Gaining a Foothold on Supply Chain Management
Supply Chain Management is the design, planning, execution, control, and monitoring of Supply Chain activities. It addresses the fundamental business problem of supplying products to meet demand in a complex and uncertain world.
Looking at Supply Chain Management, we can see that it draws on the value chain concept of business strategist, Michael Porter. It looks at supply issues at the multi-company level. It creates net value, builds a competitive infrastructure, leverages worldwide logistics, synchronizes supply with demand, and measures performance globally.
The need for Supply Chain Management came about when shorter product life cycles and greater product variety has increased Supply Chain costs and complexity. And as outsourcing, globalization, and business fragmentation became a common practice, there was now the need for Supply Chain integration. This was further emphasized with the advances in emergent technologies. which created more opportunities for Digital Transformation within Supply Chains.
The 4 Levels of Supply Chain Management Strategies
There are 4 Levels of Supply Chain Management Strategies. The first 3 strategies are foundational Supply Chain Strategies.
Before any Supply Chain can be considered sustainable, there are 3 foundational Supply Chain Strategies that need to be undertaken.
- Legal Supply Chain Strategy. There are a number of legal rules and regulations that need to be followed by organizations. The Supply Chain Strategy must cater to all legal rules. An example is a ruling according to the Restrictions of Hazardous Substances Directive (RoHS) wherein an organization must not rely on the mercury, cadmium, and chromium as they result in huge emission of hazardous substances.
- Ethical Supply Chain Strategy. To become an ethically strong organization, it is required that the organization operates with integrity and focus on what is right. The organization could develop a policy that governs the organization’s operations. It is also essential that the Supply Chain quality assurance team that is built complies with ethical sustainability.
- Responsible Supply Chain Strategy. To become responsible, the organization could spend resources in compliance with sustainable rules. The organization could set up training and development programs to drive sustainability within the organization. It can also focus on environment-friendly activities to boost its social responsibility.
Before an organization can become sustainable, significant efforts must be exerted to put the 3 foundational Supply Chain Strategies in place within the organization.
Reaching the Level of Sustainability
Sustainable Supply Chain Strategy has become increasingly important as more and more organizations are focusing on putting it in place. According to the MIT Slogan Review, over 75% of organizations listed in the S&P 500 reported sustainability reports where it shows that catering up to the responsibility is becoming highly challenging and important. There has been a significant increase and inclination towards sustainability and this depicts the importance of becoming sustainable.
With the passage of time, it has become evident that organizations around the globe are becoming fond of sustainable considerations.
Interested in gaining more understanding of Supply Chain Sustainability? You can learn more and download an editable PowerPoint about Supply Chain Sustainability here on the Flevy documents marketplace.
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