Page 23 - Performance Leadership

12 • Part I A Review of Performance Management

or industries have introduced their own regulations. Business can no
longer easily hide dysfunctional behaviors and lack of alignment.
The economics of business has changed too. Organizations are becom-
ing more “virtual.” Noncore activities, such as logistics, finance, human
resources, information technology, or even production, are routinely out-
sourced. Operational excellence throughout complete value chains is
improved by very tight value-chain integration. Many innovations today
come from organizations combining forces and creating new and unique
combinations of products and services. Think of Nike+, a collaboration
between Nike and Apple, where a sensor in your running shoes sends real-
time data to your iPod on your progress. Think of Senseo, a one-touch-
of-a-button perfect espresso machine, developed by Douwe Egberts, a
coffee maker, and Philips, the producer of home appliances. Or consider
airline alliances such as OneWorld, SkyTeam, and Star Alliance, where
competing airlines realize they can improve business performance by col-
laborating. In many different forms and shapes, organizations increase the
level of collaboration with others. Business is not a rigid hierarchy any-
more, but a looser network of organizations. Command and control is
replaced by collaboration and communication. Trust through reliable
behavior and strong intercompany alignment makes the difference.
Society doesn’t accept immoral or amoral business behavior any-
more. Organizations not only have an obligation to their shareholders,
but a need to be socially and environmentally responsible as well. Insti-
tutional investors weigh management practices in their decision to
invest in a certain company or not. Although “sustainability” and “cor-
porate social responsibility” are still just lip service in many organiza-
tions, the profoundness of this change is slowly becoming recognizable.
Organizations that pride themselves on their sustainability report and
social programs are punished even more than their peers when the gen-
eral public finds out about “incidents” caused by business processes
that are still based on maximizing efficiency at the cost of social and
environmental circumstances. Ask any manufacturing or oil company
that didn’t really drive down “clean” thinking into their operations.
Only truly authentic and aligned behavior, where every single
employee and stakeholder is motivated to do the right thing, can
change deeply rooted business processes, behaviors, and beliefs. Sus-
tainability has a deep impact on every organization’s daily life.