Enablers: The Excellent Strategy

by

Organizations in the public sector of the Abu Dhabi government are continually striving for excellence, and one key criteria that enables them to achieve sustained excellence is an excellence strategy. This Excellence Enabler, as defined by the European Foundation for Quality Management (EFQM)Excellence Model, plays a major role in achieving success as it provides organizations with a set of goals and targets in line with the needs and expectations of various stakeholders.

Much like all other enabler criteria, organizational strategy needs to be well-integrated with other enablers to achieve the desired results; the leader develops the mission, vision, and value of the firm, which then translates into the company’s strategy.This must be deployed with the help of the organization’s people resources and partnerships to develop and produce quality processes, products, and services. The importance of a well-defined and well-communicated strategy cannot be stressed enough. Simply put, strategy is the starting point to any organization’s journey to excellence.

The Government of Abu Dhabi uses the Abu Dhabi Excellence Awards in Governmentprogram based on the EFQM Model to encourage entities to develop sound strategies to attain success. This is achieved through a complex framework of analysis criteria that evaluates every aspect of an organization and guides the development of strategies for improvement.

Understanding the Needs and Expectations of Stakeholders

Excellent organizational strategies are devised with the needs and expectations of various stakeholders in clear sight, conscious thatthe strategy must ultimately benefit all groups involved in the business. The organization should understand stakeholder needs and gather input from these groups when devising a strategy. Stakeholder needs are a key influencing factor on forming company policies.

Organizations ought to be aware of any changes in trends and stakeholder requirements, and revise existing policies accordingly. For example, customers’ expectations of the company are constantly evolving with changing market trends, therefore, the organization should be proactive in requesting feedback using relevant tools at their disposal, including customer satisfaction surveys, focus groups, crowdsourcing, and various other tools using traditional and social media channels. Constant interaction with stakeholders is important for devising sound strategies for sustainable excellence.

Understanding the Needs and Expectations of the External Environment

A thorough understanding of external factors—political, economic, social, technological, legal, and environmental (PESTLE)—is an integral input to the development of a viable and sustainable strategy. Commonly referred to as a PESTLE Analysis, the process that leads to a thorough understanding of these factors providesthe organization’s leaders and strategists with a clear view of the company’s “playing field”, which is an integral step to setting the stage for an excellence strategy.

Any changes an organization makes to itsstrategic plan must take into account legal, political, regulatory, and compliance requirements, as well as all other external indicators,including the potential impact future changes may have on the business and its stakeholders. A firm cannot exist in a bubble; the ramifications of its actions and the complex reciprocal relationship it has with the external environment must be addressed and accounted for in maintaining a sustainable organizational strategy.

Understanding Internal Performance and Capabilities

An excellent organization knows its core strengths; even more, its weaknesses. Reality checks are important, and so an organization must carry out regular performance and capability assessments and verify and validateresults from those assessments to establish their current performance levels and identify areas for improvement. Performance management models such as the balanced scorecard are effective tools for measuring performance and keeping strategic goals in perspective. (Find more information on the balanced scorecard at http://balancedscorecard.org/).

An organization also builds excellence by understanding the performance and capabilities of its existing and potential business partnerships. This enablesan organization to define and refine its strategybyincorporatingwithin it complementary strengths and weaknesses that exist or may be anticipatedin current and future partnerships. An excellent organization is cognizant of not only its own strengths and weaknesses, but those ofthe firms it does business with. It mitigates the weaknesses and employs the strengths to maximize the benefits of the partnership.

Performance data should also be analyzed from a technological perspective, carefully considering potential technology investments that could improve specific processes and overall company performance. Increasing technical knowledge and acuity can provide strategists and decision makers with insightful new ways to operate the business—to increaseefficiency through the use of technology that might add value in serving the firm, than the current processes in place. Constant analysis of information is paramount in ensuring a sound strategy, and this data should always be compared to relevant benchmarks which can help gauge the firm’scompetitive advantage and future potential.

Developing, Reviewing and Updating Strategy

The excellent organizationalways keeping its vision and mission in mind, develops strategies to support them, and policies to maintain its strategies. These strategies and policies must be clear, thorough, and well-thought-through to take into account various aspects mentioned above. To judge whether the strategy truly reflects the company’s vision, it must undergo constant review by validating whether it is advancing the firm toward the desired results. These results must be in accordance with the vision and mission and benefit all stakeholders involved.Understanding and finding solutions to any discrepancies that may arise is essential so that the strategy can be revised accordingly.

The strategy should work to generate benefits for all stakeholders, including the broader society in which the enterprise operates. Businesses that are only concerned with their narrowly-defined self-interests do not endure in today’s environment.A business that demonstrates concern for society and the environment is on the right path to success and recognition. As a member of the EFQM, Abu Dhabi Gas Industries Ltd,(GASCO) is a government organization that strives for excellence in all aspects. As part of their strategies and policies, GASCO aims to be a socially responsible organization with a sustainable and green strategy that envisions the organization as trustees for the future. GASCOare continuously seeking ways to reduce the emission of greenhouse gases and explore new technologies that can further help reduce the environmental impact of their operations. Seekinga balance between current production and growth on the one hand, and environmental protection on the other; to reduce the rate of depletion of natural resources so they are preserved for future generations. For these considerations,GASCO has won the ShiekhKhalifa Excellence Awardon numerousoccasions.

Such organizations show their ability to look ahead into future scenarios and adjust their strategies so they can balance future risks and current rewards. By understanding the nature of the materials they work with and molding their strategy to help preserve and sustain the natural resources extracted from the earth. An organization’s strategies should be forward thinking so that sustainable excellence is achievable. Such principles lead the many organizations within the Abu Dhabi government to work toward promoting economic and societal sustainability and are among thekey pillars of the Abu Dhabi Vision 2030.

Communicating, Implementing, and Monitoring Strategies

An organization’s strategy must be effectively communicated at all levels, a task that can only be accomplished through the use of active leadership and communication skills.As the famous economist and business guru, Michael Porter, puts it, “The best CEOs I know are teachers, and at the core of what they teach is strategy”. Every level and every aspect of the organization must have this strategy ingrained within its core systems, and employees shouldadopt this as their guiding force. Employees should feel that they are part of, and responsible for, the successful implementation of an organization’s strategy. Unless an organization’svision and strategic goals are shared amongst its human resources who feel empowered to contributing to the strategy and to achieving the goals set, a success story is an unlikely outcome.

Excellent organizations are always evaluating their operations with a critical eye, to determine whether they are capable of meeting targets and goals in ways that maximize their overall value to all stakeholders. Key performance indicators must be established to judge the performance of the organization, and measurements against those indicators must be detailed enough forthe organization tothoroughly and honestly evaluate whether they have been met. Benchmarking is another useful technique that may be used to gauge performance. Comparing your organization’s performance measures with peers can help identify performance gaps and set new and challenging targets.

An excellent organization deploys strategy in a systematic manner, keeping long and short term objectives in mind, whilst effectively managing resources to achieve them. Processes need to be designed and developed using a top-down approach to ensure alignment with strategic objectives and add value to the organization.Stakeholders, including customers and employees,should be satisfied with the strategy implementation and its end result.

Innovation is a key factor that sets excellent organizations apart from the rest. The organization must set goals to encourage innovation; constantly evaluating and refining strategies to encourage and clear the way for innovative ideas. Any successful public sector strategy must allow room for new ideas that react with and may even redefine the economic environment in which the organization operates. In an effort to become one of the top governments in the world, the Abu Dhabi government has taken great strides to promote innovation in both the public and private sectors through numerous initiatives and awards. The Abu Dhabi Department of Economic Development put forth an innovations policy that aims to achieve sustainable economic growth—one that will help propel the nation into a prosperous future. More recently, the Ministry of Interior also launched a new website to promote a culture of innovation and encourage the sharing of creative ideas. These are just a few examples that demonstrates the importance of innovation in the public sector and the necessity of keeping one’s creative juices flowing!

Case Study: Strategy Excellence in the Abu Dhabi Government

The economic policy of the Abu Dhabi Government embraces a forward-thinking strategy for economic growth. Their Vision dictates a shift away from the oil and gas sector, and development of non-oil industries to contribute a larger percentage to the Abu Dhabi GDP. In this spirit, the Economic Vision 2030 visualizes an economy based on sustainable, knowledge-based industries, rather than relying on a natural resource which has fickle production rates and prices and an uncertain future,all of which combine to create an economic landscape difficult to anticipate and manage.As evidenced by the steady growth in the Abu Dhabi GDP, the government has been able to successfully deploy this strategy.The contribution to GDP of non-oil based industries increased6.7% in 2011 and 7.7% in 2012. The goal of the Economic Visionis for non-oil based industries to contribute 25% of the total GDP in 2025 from 16.2% recorded in 2009.

This all-encompassing vision is implemented through various government organizations. The Abu Dhabi Department of Economic Development (DED)put forth its Innovations policy and developedan Abu Dhabi Innovations Index, prepared in collaboration with INSEAD, one of the world’s leading graduate business schools.This produced positive results, placing Abu Dhabi in a position to gain access to information necessary for innovation. The results showed that compared with other economies reliant on natural resources, Abu Dhabi stood out as being highly capable and very efficient in the adoption and positioning of knowledge, new technologies, products and services across its entire economy.DED attributed this success, in part, to the policies established by the Abu Dhabi government.

The Abu Dhabi Innovations Indexoffers a comprehensive set of guidelines which can help an organization develop strategies that will garner excellent results.  Allowing an organization to assess every aspect of its operations and environment and considerits strategic requirements from multiple dimensions so that strategies developed yield results that benefitsnot only the organization, but all of its stakeholders as well. Taking into account all of the organization’s responsibilities—internal and external, employees and customers, social, environmental, legal—and helps the organization to thoroughly evaluateitself,encompassing all these factors into consideration in order to develop a strategy that leads to excellence.The Abu Dhabi government achieves excellence using this model and supports other organizations do so as well.

by