A truly compassionate world would have looked a lot different from the one we have today. At least from the world we see in the media. But don’t we have compassion? Has Humanity been reduced to a bunch of egoistic brutes stepping on each other and only thinking of themselves? I think not. There are signs we are becoming more and more compassionate. Still, we have the Money Monster lurking over all of us, in the back of our minds. The scarcity monster, telling us that ‘I have to think of my self, or else I might suffer’. I spite of this, there are many people trying to be compassionate.
What does it really mean, being compassionate? Giving some money to the poor through help organizations? Hardly. In the daily life being compassionate means you have an open heart to your surroundings. It means listening to your loved ones. Helping your old aunt.
Compassion is one of the many feelings embedded within Love. Compassion means opening your heart, feeling what others feel and really understanding their problems while showing them you care. How is this done? It is done by being on the other ones wavelength. Getting out of ones own head and into ones own heart. Showing true interest, not just ‘pretend interest’. My mum was a good woman, but she didn’t always understand me, even though she wanted to and tried to. So, when she didn’t manage this, she ‘pretended’ her compassion, and I could see right through it. That she didn’t understand.
In a case like this, it’s better to say ‘I don’t understand, but I’m trying to’, rather than pretend. Understanding is crucial for true compassion. Without real understanding, compassion will be fake. If you want to show your compassion to someone, it is not about handing out money or being sympathetic. No. It’s about understanding the best you can and doing what you can to help.
Misunderstood compassion can be harmful if it results in blindly doing something for someone that they don’t need. True compassion means understanding what they need and then fill your part in helping fill that need. Many people want to help, and many people need to be helped.
What does being compassionate do for you? Not that you should need anything in return for being compassionate. Still, any loving feeling and action you can share with the world will reflect positively back on you. But of course, this can not be the reason for the feeling or action, if so it will not work, because the feeling will not be real. On the other hand, if you are truly compassionate and constantly work on helping others, you will be helped as well.
I know it is difficult to be totally unselfish in this world where we are fooled to believe we have to think of ourselves first, and then the next person. But look at the people who do truly selfless, compassionate work in this world. Thousands and millions of people follow them and help them, and all their needs are being met, as they help meet the needs of others. Being compassionate is a mindset. Actually, you have to get out of your mind, because compassion is in your heart and soul, not your mind. Compassion can not be calculated, it has to be felt and shared.
By night Sujitha Rajendrababu, helps her mother make puris, a type of Indian bread, in the compact kitchen of her one-bedroom flat.
By day she works as an assistant engineer, leading a team of 10 in a car factory manufacturing parts for Renault-Nissan Alliance vehicles.
Like hundreds of thousands of people across India, Sujitha's journey from an under-developed village in India's south to the outskirts of the city of Chennai (Madras), has transformed her life.
"My native place is a small village called Kizhattur. There is not even proper transport over there," says Sujitha. "Because I grew up in that situation, I knew that I had to study hard and find a job."
And she did just that - albeit against the wishes of her family who wanted her to marry and settle down.Sujitha secured a diploma and when Renault-Nissan advertised a position for a junior engineer five years ago, she jumped at the opportunity.
"I can't even imagine what I would be doing if I did not work in this factory. Perhaps I would be in the village doing small jobs on the farm," she says. "I would just about make ends meet."
Detroit of Asia
Nissan and Renault are two of several international carmakers that have set up shop outside Chennai in the last 10 years. Today the area, known as the "Detroit of Asia", is a thriving manufacturing hub where cars are produced for export as well as for the domestic market.India makes about 24 million vehicles a year, nearly a fifth of them in this region of Tamil Nadu state.
"We have seen a number of other car manufacturers establish plants in the state and that has helped us attract and help local suppliers relocate and set up in Tamil Nadu itself,"says Colin Macdonald, managing director of Renault-Nissan. "Since 2010, we had about 15% of our suppliers in the Tamil Nadu area. We are now operating with 60% of our Indian suppliers in Tamil Nadu. So from an employment perspective, this is huge."
Creating jobs is central to Prime Minister Narendra Modi's Make in India campaign, an effort to promote inclusive growth in the country.Modi has promised foreign players he will make it easier to do business in India.
But more than two years after taking power, and after introducing a raft of policies, unemployment rates are at a five-year high.According to a recent government survey, about 77% of Indian households have no regular wage or salaried person, and so for many, life is not improving fast enough.
Domestic market growth
Despite that, success in places like Chennai is a sign that India remains appealing to foreign companies. Now that the area has become an auto hub, cost-effective raw materials can be sourced. With the port less than 100km away, it is easy to import parts and export products back out. Labour is cheap too.
The growth of the domestic market only adds to India's appeal."Today, only 20 in 1,000 people in India own a vehicle but we expect that to grow dramatically in the next five years and we expect the market to be five million cars by 2020, making India the third biggest market on the planet," says Colin Macdonald.
A matter of pride
For Sujitha Rajendrababu, owning a car one day has become more of a reality than a dream."What I had dreamed of becoming in the future was made true by this job. I do not know how to express this." The daughter of a farmer, she has already used the money she has earned to buy a fridge, a TV, some jewellery and even a holiday around India. But her ambitions don't stop there.
"My long-term goal is to become the manager of the stamping shop. I don't only want to be the manager of the stamping shop, but of this organisation as well." And she wants the same for other people just like her. "A lot of people in my village ask me if I can help them find jobs for their children. That makes me feel proud."
First the bad news: If you’re not willing to embrace change you’re not ready to lead. Put simply, leadership is not a static endeavor. In fact, leadership demands fluidity, which requires the willingness to recognize the need for change, and finally, the ability to lead change.
Now the good news: As much as some people want to create complexity around the topic of leading change, the reality is creating, managing and leading change is really quite simple. To prove my point, I’ll not only explain the entire change life-cycle in three short paragraphs, but I’ll do it in simple terms anyone can understand. As a bonus I’ll also give you 10 items to assess in evaluating whether the change you’re considering is value added, or just change for the sake of change…
An Overview on the Importance of Change:
While there is little debate that the successful implementation of change can create an extreme competitive advantage, it is not well understood that the lack of doing so can send a company (or an individual’s career) into a death spiral. Companies that pursue and embrace change are healthy, growing, and dynamic organizations, while companies that fear change are stagnant entities on their way to a slow and painful death.
Agility, innovation, disruption, fluidity, decisiveness, commitment, and above all else, a bias toward action will lead to the creation of change. It is the implementation of change which results in evolving, growing and thriving companies. While most executives and entrepreneurs have come to accept the concept of change management as a legitimate business practice, and change leadership as a legitimate executive priority in theory, I have found very few organizations that have effectively integrated change as a core discipline and focus area in reality. As promised, and without further ado, the change life-cycle in three easy steps:
1. Identifying the Need for Change: The need for change exists in every organization. Other than irrational change solely for the sake of change, every corporation must change to survive. If your organization doesn’t innovate and change in accordance with market driven needs and demands it will fail - it’s just that simple. The most complex area surrounding change is focusing your efforts in the right areas, for the right reasons, and at the right times. The ambiguity and risk can be taken out of the change agenda by simply focusing on three areas: 1) Current Customers - what needs to change to better serve your customers? 2) Potential Customers…what needs to change to profitably create new customers? and; 3) Corporate Culture…what changes need to occur to better serve your workforce and improve their resources such that they can better influence items one and two above?
2. Leading Change: You cannot effectively lead change without understanding the landscape of change. There are four typical responses to change: The Victim; those who view change as a personal attack on their persona, their role, their job, or their area of responsibility. They view everything at an atomic level based upon how they perceive change will directly and indirectly impact them. The Neutral Bystander; This group is neither for nor against change. They will not directly or vocally oppose change, nor will they proactively get behind change. The Neutral Bystander will just go with the flow not wanting to make any waves, and thus hoping to perpetually fly under the radar. The Critic; The Critic opposes any and all change. Keep in mind that not all critics are overt in their resistance. Many critics remain in stealth mode trying to derail change behind the scenes by using their influence on others. Whether overt or covert, you must identify critics of change early in the process if you hope to succeed. The Advocate; The Advocate not only embraces change, they will evangelize the change initiative. Like The Critics, it is important to identify The Advocates early in the process to not only build the power base for change, but to give momentum and enthusiasm to the change initiative. Once you’ve identified these change constituencies you must involve all of them, message properly to each of them, and don’t let up. With the proper messaging and involvement even adversaries can be converted into allies.
3. Managing Change: Managing change requires key players have control over 4 critical elements: 1) Vision Alignment - those that understand and agree with your vision must be leveraged in the change process. Those who disagree must be converted or have their influence neutralized; 2) Responsibility - your change agents must have a sufficient level of responsibility to achieve the necessary results; 3) Accountability - your change agents must be accountable for reaching their objectives, and; 4) Authority - if the first three items are in place, yet your change agents have not been given the needed authority to get the job done, the first three items won’t mean much. It's critical you set your change agents up for success and not failure by giving them the proper tools, talent, resources, responsibility and authority necessary for finishing the race.
There you have it; the foundational elements of change in three short paragraphs. Now that you understand change, following are the 10 points that need validating prior to launching a change initiative:
1. Alignment and Buy-in: The change being considered should be in alignment with the overall values, vision and mission of the enterprise. Senior leadership must champion any new initiative. If someone at the C-suite level is against the new initiative it will likely die a slow and painful death.
2. Advantage: If the initiative doesn’t provide a unique competitive advantage, preferably a game changing advantage, it should at least bring you closer to an even playing field.
3. Value Add: Any new project should preferably add value to existing initiatives, and if not, it should show a significant enough return on investment to justify the dilutive effect of not keeping the main thing the main thing.
4. Due Diligence: Just because an idea sounds good doesn’t mean it is. You should endeavor to validate proof of concept based upon detailed, credible research. Do your homework – put the change initiative through a rigorous set of risk/reward and cost/benefit analyses. Forget this step and you won’t be able to find a rock big enough to hide under.
5. Ease of Use: Whether the new initiative is intended for your organization, vendors, suppliers, partners or customers it must be simple and easy. Usability drives adoptability, and therefore it pays to keep things simple. Don’t make the mistake of confusing complexity with sophistication.
6. Identify the Risks: Nothing is without risk, and when you think something is without risk that is when you’re most likely to end-up in trouble. All initiatives should include detailed risk management provisions that contain sound contingency and exit planning.
7. Measurement: Any change initiative should be based upon solid business logic that drives corresponding financial engineering and modeling. Be careful of high level, pie-in-the-sky projections. The change being adopted must be measurable. Deliverables, benchmarks, deadlines, and success metrics must be incorporated into the plan.
8. The Project: Many companies treat change as some ethereal form of management hocus pocus that will occur by osmosis. A change initiative must be treated as a project. It must be detailed and deliverable on a schedule. The initiative should have a beginning, middle and end.
9. Accountability: Any new initiative should contain accountability provisions. Every task should be assigned and managed according to a plan and in the light of day.
10. Actionable: A successful initiative cannot remain in a strategic planning state. It must be actionable through focused tactical implementation. If the change initiative being contemplated is good enough to get through the other 9 steps, then it’s good enough to execute.
Overcoming all obstacles to bring a change in the lives of others not only requires the zeal to do so but also the determination of not giving up mid-way. Kamlesh Zapadiya exemplifies this statement truly. A man living on a farm with almost no access to electricity has managed to build a website for students to engage them into studies in a fun-filled way. Read more to know how.
"Education is the biggest gift one can give to the country,” believes Kamlesh Zapadiya, a primary school teacher who travels 20 kms everyday from his village to a cybercafé in a nearby town to make education more interesting for his students.
Hailing from Rajkot, Gujarat, this 35-year old man was very unhappy with the way he saw children studying. He always believed that studies should be fun and students should understand and enjoy what they learn. After much thinking he came up with an idea to convert the entire syllabus from classes 1 to 10 into a quiz format.
“It is like Kaun banega Crorepati,” Zapadiya says. He, along with his friends, has developed a website called Edusafar where they upload the entire syllabus. The format has also been recognized by Indian Institute of Management – Ahmedabad. The syllabus can also be downloaded free of cost from the website.
“The quiz format module and the syllabus are ready to be used. They just need a final proofreading and we are waiting for that to officially launch the books,” Zapadiya says.
Edusafar was started by Zapadiya and his friends after reading and researching many articles on educational aids, tutorials and tools.
“While I was researching, I learnt a lot of interesting things and I wanted to share them with the public. Hence, Edusafar has all the study materials and information that one needs related to primary and secondary education,” says Zapadiya.
“The idea is to make education simpler and easy to understand. Being a teacher, I understand the troubles faced by students and this site is expected to act as a tool for simpler learning alternatives,” says Zapadiya. The website is managed by a team of 6 members who are all teachers in various schools of Gujarat.
“The biggest challenge is electricity. I live in a wadi (orchard) to take care of the farm with my family so whenever I have to do something I have to travel very far to get the laptop and phone connected,” Zapadiya says. Another challenge is communicating with the other members. As there are very limited modes of communication in the village, it is very hard to get everyone available at the same time.
Zapadiya plans to develop an app for those who are preparing for competitive exams. The app will have various general knowledge and current affairs questions from which a user can learn with just a click. “There are no such apps or books in Gujarati. For those who don’t understand English and still want to crack these exams, this app could come in handy,” he says.
“The idea was to make students interested in the subject rather than forcing them to cram the letters in the book. I think this will really help the current education system which is theory- and book-based,” Zapadiya says.
Zapadia was among 100 teachers who were felicitated by the Gujarat Innovative Education Council and the Gujarat Council of Educational Research and Training, for their innovative ideas in education. It is people like Zapadiya who inspire each one of us to take a stand and bring a change no matter how tough the situation is. In spite of the biggest obstacle of lack of electricity, Zapadiya has managed to produce something that could change the lives of thousands of people.
Story Courtesy: Ankit Vyas, Educational Innovation Bank, IIM-Ahmedabad, who is doing some great work in researching and documenting stories of innovative teachers in Gujarat.
Banking, for Joseph Santhumary Parthiban, isn’t really about money. It is about an everyman’s hope for a dignified life. As an employee of a national bank in Delhi, he persuaded hundreds of street hawkers and beggars to open bank accounts. When he moved to Salem in his home state Tamil Nadu, he realised people in remote areas couldn’t even visit his branch due of lack of transport. Watch what he did.
Understanding an ambidextrous organisation is one thing, making it a reality is another. Antonio Nieto-Rodriguez provides an execution roadmap. Imagine you had to do your work using both hands; sometimes the left, sometimes the right and other times both of them simultaneously. Imagine if everyone in your organisation faced the same challenge.
Being able to use both of your hands adroitly is known as ambidexterity. And this is a phenomenon increasingly applied to companies where the tension between two different business models is described as “organisational ambidexterity”. The concept was first applied to managerial contradictions by the academic Robert Duncan in 1976 and has since entered various streams of research - in strategic management as alignment versus adaptability; and in operations management as flexibility versus efficiency; or in innovation management as radical versus incremental.
Research has shown that ambidexterity leads to higher performance but at the same time it emphasises that the tension between two distinct capabilities is a key challenge.
Exploration and exploitation
The most accepted definition of ambidexterity is a balance between explorations and exploitation; organisations capable of exploiting their existing competencies while simultaneously exploring new opportunities. James March refers to this as the exploration of new possibilities and the exploitation of old certainties. Exploitation includes such things as choice, refinement, production, selection, execution efficiency and implementation. While exploration encompasses knowledge creation and analysis of future opportunities.
Organisations that engage in exploration to the exclusion of exploitation are likely to find that they suffer the costs of experimentation but without gaining many of its benefits. These companies exhibit too many undeveloped new ideas and often too little distinctive competence. A well-known example of too much emphasis on exploration is Ericsson, the telecom giant that led the development last century of the global system for mobile communications. At its peak, its R&D organisation employed 30,000 people in 100 technology centres and with considerable duplication of work. Despite its strong focus on exploration, the company’s results went into steep decline. Ericsson laid of around 60,000 employees and closed most of its technology centres to put focus back on exploitation in order to return its businesses to profitability.
Conversely, organisations that engage in exploitation to the exclusion of exploration are likely to find themselves trapped in stable equilibrium; going nowhere fast but efficiently. Maintaining an appropriate balance between exploration and exploitation is a primary factor in the prosperity of any corporate system.
Most of the academic work and research has focused on trying to explain the problem of organisational ambidexterity. Julian Birkinshaw and Cristina Gibson in their 2004 article ‘Building Ambidexterity into an Organisation’, (MIT Sloan Management Review 2004), are among the very few scholars trying to provide a framework for businesses to become ambidextrous. They describe organisational ambidexterity as the capacity to simultaneously achieve necessary alignment (exploitation – excellence in daily operations) and adaptability (exploration - referring to the organisation’s ability to innovate and change in response to the changing demands in the environment). To ensure long-term success, an organisation needs to be able to master both adaptability and alignment. Focusing too much on that alignment can often make an organisation lose long-term vision, while emphasising adaptability over alignment means building tomorrow’s business at the cost of today’s.
Birkinshaw and Gibson explain that the two forms of organisational ambidexterity come under two categories - structural and contextual:
Structural ambidexterity is all about creating separate organisations or structures for different types of activities - organisations that are either solely aligned or solely adaptive, where employees have clear mandates and then they are rewarded accordingly. Contextual ambidexterity is when individuals make choices between either the exploitation-oriented or the exploration-oriented activities in their daily work. And to allow this, it is necessary for the organisation context to be more flexible, allowing employees to use their own judgement as to how they divide their time between their adaptation-oriented and their alignment-oriented activities.
Unfortunately, in today’s world, very few organisations can afford to have independent structures to focus solely on exploration. This was the case for many companies which invested heavily in R&D (such as Ericsson). These companies usually had a fairly independent organisation, with its own management and own budgets, isolated from the core day-today business. But after the crisis and the resulting extreme focus on efficiency and cost control most of these independent structures have been drastically reduced or dismantled.
A new view
It is clear that the structural separation focused on by much academic research is unrealistic. It is mostly focused on theory rather than practice and riddled with jargon like “exploitation, context, exploration and organic systems ambidexterity”. So it is little wonder that organisational ambidexterity often fails to resonate with executives as an important concept, and yet, it has been proven that it leads to greater returns. As a practitioner I have had to develop an effective means to communicate and execute these concepts. And to do so, I describe this concept of organisational ambidexterity as the tension between two different business models: running-the-business versus changing-the-business.
Running-the-business is the alma mater of the organisation. It includes the core processes, such as operations, sales, customer services and fnance. Most of the revenues generated by any given firm will come from the running of business activities. Running-the-business keeps the company alive, if you stop running it, the company will quickly die. And the focus of running-the-business is a short-term one; objectives are mainly commercial, financial and performance-driven; it is about efciency, productivity, speed; in academic terms it is about exploitation. It is akin to writing with the right-hand.
Changing-the-business is the future of the organisation. It includes all the initiatives, projects and the strategic and tactical programmes. Organisations often have hundreds and thousands of initiatives running in parallel. Changing-the-business creates future value for the organisation; the objectives are often more strategic and closer to the vision, but the benefits are only achieved in the medium and long-term, and, as such, are less tangible and quantifiable than operational objectives. These targets aim at transforming the business to significantly increase its growth and its profitability. In addition, it is highly risky and there is no certainty that benefits will be achieved at all. In academic terms this is exploration. It is akin to painting left handed.
The main trouble that senior executives have in practice is that it is very difficult to focus on both dimensions at the same time. If you focus too much on the short-term objectives, the competition will soon catch up as market conditions evolve. On the other hand, if you put too much into changing-the-business, you sacrifice today in the hope of a better future. And, to make it even more complicated, being successful in a single dimension is also extremely difficult. Revealing research by Manuel Hensmans and colleagues investigated 215 of the largest publicly listed UK firms over a period of 20 years, from 1984 till 2003. First they looked at how well companies could run their business over a long period. Out of the 215, only 28 of the companies were able to consistently perform at the frontier of their sector over the two decades. Of this 28, only three were able to make major strategic changes while still performing consistently over the 20 years.
Ambidextrous real time
So, how does all of this affect strategy execution and the management of the business? To better understand the dichotomy between running and changing-the-business and the implications in terms of strategy execution, I looked at the strategies of 40 of the Fortune Global 500 in 2010. I assumed that when defining their strategies, most companies do not differentiate between their operational and their strategic objectives. As an illustration, listed below are the strategic objectives of three of the top companies in the world. In parentheses I assess whether those strategic objectives will be achieved through either running-the-business, changing -the-business, or both:
2010 revenues: $408,214m
1. Dominate the market wherever Walmart has a presence. (Run-the-business). 2. Grow by expansion in the US and internationally (Changethe- business). 3. Create widespread namerecognition and customer -satisfaction with the Walmart brand, and associate the retailer with the reputation of offering the best prices. (Both run- and change-the-business). 4. Branch out into new sectors of retailing such as pharmacies, automotive repair, and grocery sales. (Change-the-business).
Royal Dutch Shell
2010 revenues: $285,129m
1. Reinforce position as a leader in oil and gas to provide competitive shareholder return while helping to meet global energy demand responsibly. In a new period of growth sharpen performance and achieve a reduction in overall costs. (Change-the-business). 2. In Upstream, explore new oil and gas reserves and develop projects where the company’s technology and know-how add value to the resource holders. Assessing more than 35 new projects from some 8 billion barrels of oil equivalent resources, which should underpin Upstream growth to 3. 2020. (Change-the-business). 4. Downstream continues to focus on profitability, with plans to exit 15 per cent of refining capacity and 35 per cent of retail markets and growth investment to enhance the quality of manufacturing and marketing portfolios. (Both run and change-the business).
2010 revenues: $204,106m
1. Increase supply of low CO₂ / fuel-efficient vehicles (HVs and compact). (Both run- and change-the business). 2. Improve profitability through cost reduction. (Change-the-business). 3. Expand all operations in resource-rich countries and emerging markets - full entry into the Indian and Brazilian markets. (Change-the-business). 4. Accelerate PHV and EV development (Change-the-business). 5. As it can be seen, the leading companies in the world mix short with long-term objectives and they lack a clear finish line. Most of the time it is a mix of running and changing the business’s activities; more proof that organisations need to build ambidexterity capabilities, especially considering that strategic objectives of organisations competing in the same industry are very similar.
The dominant context
The trouble is that while the mix is the thing, the organisation context (all of the systems, processes, governance, values, culture, rewards and so on that make up an organisation) tends to focus on running-of-the business as explained in the table (right), and yet, the company’s future value is mostly created by changing-of-the business:
Building organisational ambidexterity requires a radical change in every single element that composes a company (the organisational context). I have developed and road-tested a framework that addresses these six critical pillars:
1. Leadership and culture
Leadership is where everything starts and ends in a company. Although the company’s culture and values are defined over time and can remain unchanged for decades, the CEO and top management can alter these elements at any point with their messages and actions. In an ambidextrous organisation, the CEO is the main driver of change; thus, he or she needs to be the first one to adopt the culture and values and to gain top management’s support in transmitting these principles to the rest of the organisation. Top management needs to be aware of how run-the-business and change-the-business activities operate independently as well as being aware of how they interact (Jack Welch at his time as General Electric’s CEO is the perfect example).
2. People and skills
The biggest challenge to the People and Skills pillar of an ambidextrous organisation is often to seamlessly align two different sets of HR models. The organisation must first define the change-the-business aspect and then integrate it fully with the run-the-business model. Highly motivated employees will gain experience in both dimensions alternately, for example, spending two years in a marketing position and then moving on to manage a CRM implementation project. Employees cannot become managers if they have not previously managed a large project (which is the case in the Dutch company, Philips). It is important that HR management is aware of these different models and that it takes them into account when defining the organisation’s HR policies.
3. Structure and governance
Having the right organisational and governing structure is probably the biggest challenge of becoming ambidextrous. Making changes within an organisation is extremely complicated and this is for two fundamental reasons: those that pertain to history and those relating to human behaviour. First, organisations are built over many years; and over time, they become rusty, expensive to run, and out of touch with reality. Second, the hundreds and sometimes thousands of individuals that make up an organisation have their old habits, which they are often reluctant to change. Some of these individuals are also influenced by decision-making power, which often means who has the largest department, the highest budgets, and the biggest salary.
This pillar is one of the most difficult business elements for which to find the right balance, because both the organisation and the external environment are constantly evolving and changing. (Microsoft has recently announced a large reorganisation to adjust its imbalance and become more agile) Implementing the right connections between the change-the-business and the run-the-business activities is fundamental for the execution of the strategy.
If this optimal balance is achieved, the organisation will become extremely responsive to the changed environment and able to quickly react to the competition. Eventually, the organisation can become a trendsetter in its industry. (Companies that excel in execution establish a Strategy Execution Office that connects both dimensions. Harvard professors Robert Kaplan and David Norton call it the Office for Strategy Management.)
4. Processes and methods
Processes, methods, and standards are necessary to ensure that work is performed consistently throughout the organisation. Each process has a specific objective, which requires the performance of certain activities to produce the desired output. Not only do processes help to gauge performance and efficiency, they also facilitate continuous improvements and they give management better control over the company. Nevertheless, most organisations have mature run-the-business processes. This is not so with the change-the- business dimension, whose processes are not fully developed and which are also much less embedded in the organisation, or for the link between the two dimensions.
Project- and programme-management are the central change-the-business processes. This methodology comprises a set of standards, templates, roles, responsibilities, and governing bodies whose objectives are to always ensure consistency in management and execution of projects. The layer that rests on top of all project and programme management activities is project portfolio management. And this is the cockpit of the change-the-business dimension. It should be a structured approach for collecting all of the new project ideas; a procedure to prioritise and select the new project ideas.
Ongoing projects must also be prioritised, particularly the first time the prioritisation process is implemented. The selection process has to be fair and transparent, based on criteria against which the new proposal is assessed. Some of the common criteria for analysing the new ideas are net present value (NPV), return on investment (ROI), payback period, strategic alignment, as well as risk and complexity, and interdependencies. One very important selection criteria involves ensuring that the company has the right competencies to deliver the project; this is determined by performing a capability check. I recommend not developing formulas that automate the process of prioritising and selecting the projects. The exercise is mainly to provide management with different orientations and viewpoints, but the ultimate decision has to be made by management based on human intelligence.
To become an ambidextrous organisation, the run-the-business and the change-the-business processes and methods must interconnect at certain critical points. If these connection points are missing, the company will remain very strongly unbalanced in the direction of its run-the-business side, as this is generally its dominant dimension.
5. Systems and tools
None of the improvements above can be achieved without a set of critical systems and tools that support the execution and management of both the run- and change-the-business components. Organisations today are composed of an amalgam of applications. Each dimension has specific applications that are needed to efficiently perform its role in the business. If we consider that strategy execution is the combination and integration of the run and the change, then we can conclude that companies today don’t have any software to plan and to execute their strategies.
This is one of the reasons why strategy execution is so difficult; and although many IT vendors claim to have produced a strategy execution tool, this is not the case. In fact, there is no single tool that can cover both sides of the business and consolidate the information to allow management to follow up the execution of their strategies. The all-embracing strategy execution tool has not yet been invented. On the other hand, being regularly confronted with the lack of such a tool has led me to find a temporary solution that I believe should form the basis for its future development.
This temporary solution involves building a strategy execution system based on a dynamic enriched data warehouse with simulation functionalities. The data warehouse connects to all the relevant systems used in the run- and the change-the-business dimension and extracts only the relevant data needed for management to build and follow up on the strategy. The tool also establishes controls on the quality of the data, monitoring the accuracy of the information but ensuring that the data is corrected at the source.
6. Enterprise performance management
Enterprise performance management is the name given to a framework (e.g., processes, tools, performance indicators) that manages performance and measures it against predefined operational, commercial, and strategic goals. Some of the very well-known strategy execution management methodologies include something called total quality management (TQM), Economic Value Added (EVA), Six Sigma (6Σ), and Activity Based Costing (ABC); but the one that is most widely used is the Balanced Scorecard, developed in 1992 by Kaplan and Norton. The main drawback of the Balanced Scorecard, and the other enterprise performance management methodologies, is that they address only the run-the- business dimension, thus failing to account for a large and key element of strategy execution. Enterprise performance management should always be a top-down framework that focuses on managing the execution of the firm’s strategic goals. It should cover both run-the business and change-the-business dimensions and monitor the execution of commercial and operational goals with the company’s strategic roadmap.
What does sustainability mean?
Depends whom you ask. (Debates about it can get warm.) But at root it’s the idea that systems—including natural and human ones—need to be regenerative and balanced in order to last. We believe that that means all kinds of systems: economic, environmental, societal, and personal. The sustainability question is: How can we design and build a world in which the Earth thrives and people can pursue flourishing lives?
Are there other definitions?
Yes—too many to count. Some focus on environmental impact alone, or emphasize the idea of the triple bottom line (measuring performance of organizations or communities on separate economic, environmental, and social dimensions). One of the best known general definitions emerged from a 1987 United Nations report about sustainable development, which was described as development “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Increasingly, attempts at definition are recognizing that the needs of natural, economic, and social systems are so interdependent that have to be considered in an integrated way.
Why "The Sustainability Initiative?"
However sustainability is defined, one thing is true: the vital need for human society to address its challenges will end up transforming the ways we all work, live, and compete. It will have extraordinary implications for organizations and the people who lead them—work processes, organizational models, competitive strategies, and leadership methods are all going to be affected. But how? And why? And in what ways? That’s what we explore.
Who is this site for?
Leaders, managers, executives, and business practitioners of every kind. Also: anyone interested in understanding how sustainability will change management and our individual economic lives.
How can it help me?
Several ways, for starters. 1) It will help you understand better the forces that your organization (and every organization) will be affected by as sustainability problems of all sorts make their consequences felt—and as the attempts to solve those problems bring consequences of their own. 2) It will help you navigate through the more and more overwhelming mass of information about sustainability—filtering for you the information that will matter most to managers. 3) By offering the best insights of thought leaders, researchers, and practitioners, it will help you fend off threats and capitalize on opportunities that sustainability presents.
Do you mean that it’s about “going green?”
Definitely not (though we will help you learn something about that, too). We think that sustainability as a business issue will be core to every organization’s strategy agenda. It will transform management and strategy in ways that might appear to have little to do with sustainability in its “going green” sense. We’ll move beyond mainstream thinking to explore this frontier and its implications to the management practitioner and executive.
What does The Sustainability Initiative seek to accomplish?
Our first objective is to identify the sustainability challenges that will have the greatest effect on managerial decision making, and determine which challenges pose the biggest threats and opportunities. To that end, our collaboration will conduct interviews and research, and publish findings, insights, advice, case experiences, and resources for further learning. Our long term vision is to become home to the world’s preeminent exploration of—and conversation about—the new sustainability-driven possibilities for managers.
Go to the Sustainability & Innovation homepage for MIT Sloan Management Review's most recent articles and blog posts about The Sustainability Initiative.