Editor’s Note: Below is an excerpt from the article “Sustainability Standards and KPIs As Game Changers,” written by Silvana Badita and published in the latest edition of Performance Magazine. It presents trends, solutions, and best practices for strategy and performance management through in-depth articles, first-hand how-to’s, concept presentations, case studies, and expert insights.

Companies can no longer afford to ignore sustainability. It is not just a trend but a major factor that drives where most businesses are headed. According to Globescan’s The State of Sustainable Business 2019, reputational risks, consumer demand, investor interest, operational risk, and employee engagement are some of the catalysts behind the sustainability efforts of most organizations. 

Manufacturing is one of the industries that are pressured to realign their activities with the mounting call for sustainability practices. Sustainable manufacturing refers to developing products with minimal negative environmental impacts and maximum contribution to the conservation of natural resources. These products are expected to be economically sound and safe for employees, communities, and consumers. 

Sustainable manufacturing aims to reduce the intensity of materials use, energy consumption, emissions, and unwanted byproducts while maintaining or improving the value provided for society and organizations. 

Some relevant key performance indicators that are often considered when evaluating the sustainability of manufacturing companies are:

• Environmental performance KPIs, such as: # Air emissions, % Energy utilization, % Hazardous waste etc.
• Economic performance KPIs: % Product reliability, % Conformance to specifications, $ Material cost, % Labor cost etc.
• Social performance KPIs: % Occupational health and safety, % Turnover rate, % Supplier commitment etc.

Sustainability standards are observed to ensure quality, transparency, compliance, and results in terms of making organizations accountable for their economic, environmental, and social performance.

The GRI Standards

Among the internationally renowned frameworks is the Global Reporting Initiative’s (GRI) Sustainability Reporting Standards. The GRI Standards consist of Universal Standards, which apply to all organizations and report on human rights and environmental due diligence, the new Sector Standards for sector-specific impacts, and the Topic Standards that come with the revised Universal Standards and relate to a particular topic.

Their vision is to create a sustainable future enabled by transparency and open dialogue about impacts. In this regard, they are a provider of the world’s most widely used sustainability disclosure standards.

With GRI Standards, companies can publicly present the outcomes of their activities in a structured way. This allows their stakeholders and interested parties to better see their status of how they are responding to calls for sustainability. GRI Standards can be used by any type of organization, whether large or small, public or private, or from any location or industry.

Editor’s Note: Below is an excerpt from the article “The Challenge to the C-Suite: How to Build Execution Into Strategy,” written by Adia Manea and published in the latest edition of Performance Magazine. It presents trends, solutions, and best practices for strategy and performance management through in-depth articles, first-hand how-to’s, concept presentations, case studies, and expert insights.

Strategies remain strategies until they are executed. Why is it hard for some organizations to translate what transpires in the boardroom into action?

Only 3% of the 1,526 business professionals who responded to a global survey commissioned by the American Management Association in 2019 said that their organizations were “very successful” at executing strategies.

In today’s business climate, it is critical to adopt a performance management system that makes the parts of an organization operating asynchronously to stick together like puzzle pieces. This leads to real initiatives for change and supports decision makers as they forge ahead or change course as necessary. 

A Roadmap for Results

How can leaders build execution into strategy and generate results from strategy analysis and planning? First, let’s assess the existing challenges. Although there are hundreds of failed strategies, they do not serve as a lesson. Nevertheless, researchers noticed a list of issues that stamped the misalignment of activities to corporate strategy over the years. According to Forbes, unclear communication and priorities, the lack of coordination across units, the silo behavior (unwillingness of a group to share information with another group), resistance to change, and the lack of performance culture are persistent factors that shift away the efficiency of execution from the strategy plan. 

The silo behavior prevents organizations from becoming agile, and this aspect still dominates the corporate culture. Only 9% of managers say that they can rely on colleagues in the company all the time, according to a research conducted by Harvard Business Review (HBR). Unfortunately, when confronted with this perspective, the need to compensate appears, but the result undermines the strategy as without help, they duplicate efforts, overdue the deadline or cannot meet promises made to customers. 

The same study shows that 30% of managers recognize that the failure of coordination across departments increases the chances for the performance commitments to not be reached. It also intervenes in the poor quality of performance culture as it may not promote support among units. The resistance to adapt to market circumstances is a major obstacle for an effective execution. But companies do not always fail to adapt at all. 

The problem is that most organizations react slowly to the change so there is a risk of not being able to embrace fleeting opportunities. Being reluctant to change activates the incapacity of mitigating emerging threats or even losing sight of the strategic direction.

Designing a performance management architecture leads to a bird’s view of the actual context and progress of projects or processes conducted internally. By approaching a set of performance management practices, a better structure, alignment, integration, and use of what is already in place will dominate the organizational context. In other words, the organizational strategy is digested through an integrated performance management system.

Companies must develop a strategy execution framework that aligns projects with initiatives to achieve their desired results. The project-based work is composed of activities that bring the organizational state closer to specific goals. By looking into project portfolios, one can assess the strategies in which the company chose to invest. The aim of the strategy execution framework is to align the project portfolios with the strategy. Once implemented, the framework adds a filter to the way management leads and executes in the sense that the steps taken are towards executing the strategy and not just walking around it.

Now, what is the connection between the performance management system and the strategy execution framework? Imagine the process of strategy execution as an octopus. The head is the performance management system in which the strategy is fragmented through the vision, mission, values, objectives and initiatives, while the arms are the projects conducted in portfolios that convey the alignment of resources and align with the overall strategy.

Discover how organizations can overcome strategy execution challenges by reading the rest of the article in the latest edition of Performance Magazine. Download your FREE COPY now!

Dear partners and beloved community,

On behalf of The KPI Institute, I would like to wish you all a wonderful spring and success in all your projects!

The first part of the year, as well as the beginning of a new season, brings a plus of energy in our lives, and hopefully, we can use this positive vibe to improve the organizations we are part of and to contribute to making the world a better place.

As we look forward to the challenges and opportunities 2022 has for us, I invite you to reflect on the latest practice in strategy and performance management by exploring the first printed edition of PERFORMANCE Magazine this year.  

You will find valuable insights related to adapting strategy to highly volatile business environments and structuring better performance management-related processes and tools. You will discover how employee performance is managed by modern organizations, trends in business analytics, and success stories from the public sector around the world.

For the Cover Story, I presented the highlights of The KPI Institute’s 2021 global practices report related to strategic planning, performance measurement, and strategy execution. The full version of the report will be released in April. Follow The KPI Institute’s LinkedIn page and stay tuned for the announcement!

Equipping you with the latest research and industry know-how to achieve performance excellence has always been the core of The KPI Institute’s existence. The latest issue of PERFORMANCE Magazine is just one of the many exciting things we have planned for you this year.

Enjoy reading and thank you for making us a part of your learning journey!

Cristina Mihăiloaie

Business Unit Manager – Research Division

The KPI Institute

There is no one standard performance measurement system that would perfectly fit all organizations. Just ask Fabian Stigler, who graces the cover of the July 2021 issue of the PERFORMANCE Magazine – Printed Edition.

Stigler, a project engineer at IQ Intelligentes Ingenieur Management GmbH, specializes in project management, business intelligence, and business analytics.

One of his accomplishments as a performance analyst is developing a KPI system (KPI Performance Measurement System) that simplified multiple KPIs into an overall statement. 

He has also designed a data visualization guideline that makes reporting easier to understand and presentations clearly structured. “This system is methodical and universally applicable and can therefore be used in many departments and companies/industries,” he explains. 

With over six years of experience in the international automotive industry, Stigler tells PERFORMANCE Magazine that performance measurement systems play a significant role in decision-making nowadays. He attributes this change to “the advent of digitization in the automotive industry and the ever-increasing influence of data.”

According to Stigler, technology is important in building a robust performance measurement system. To achieve that, he emphasizes the need for powerful IT instruments, such as data lakes, powerful servers, and software.

Read Stigler’s complete interview in the July 2021 issue of the PERFORMANCE Magazine – Printed Edition. He shares his insights on the usage of KPIs, his advice to professionals in his field, and his views on work-life balance. 

The latest issue discusses the employee performance management cycle and the role of departmental values in achieving a corporate vision. Readers will learn more about the OKR system being implemented in brands like Google, Accenture, Twitter, and LinkedIn and the magazine’s recommended reading list for 2021.

Sharing your views, experiences, and strategies in managing performance is a great way to make connections and strengthen your professional brand as a business leader. 

If you would like to be considered as a contributor or an interviewee to be featured in PERFORMANCE Magazine or to send advertising inquiries, contact the editor at len.cristobal@kpiinstitute.com.