Belgrado. indexfokus
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The stakeholders' perspectives in the competitiveness assessment: Indexfokus Competitiveness.
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Belgrado. indexfokus
- 1. Euro-Asia Forum in Politics, Economics and Business July 21-22, 2016 Belgrade, Serbia The stakeholders’ perspectives in the competitiveness assessment: Indexfokus competitiveness. Enrique Díaz Moreno. Industrial Engineer. Tecnun. Universidad de Navarra. M.B.A. I.E.S.E. Business School. CEO of Businessfokus. www.businessfokus.com Associated Professor at UPNA Public University of Navarre. www.unavarra.es Enrique Díaz Moreno 1
- 2. Competitiveness: Absolutely Important but a Fuzzy concept Related with the prosperity of a territory, it is accepted that competitiveness is anything that results in an improvement of its welfare. Eun-Pyo Hong. (Head. Labour statistics and competitiveness indicators unit. Statistics Directorate/OECD): • “No consensus about the precise nature of competitiveness”. • “Numerous organisations provide competitiveness measures based on own concept and data, whose comparability yet to be confirmed” Enrique Díaz Moreno 2
- 3. The problem: • There is no formula for competitiveness • Many organizations try to develop econometric models for assessing national competitiveness. • The difficulty of implementing those increases as models take more microeconomic levels: Districts, Sectors, Clusters, Organizations ... • The emotional aspects are hardly considered in these methodologies. • The analysis time required, costs incurred and lack of reliability results discourages those responsibles for these organizations. Enrique Díaz Moreno 3
- 4. Our goal: • Provide organizations in which existing assessment methodologies are impracticable, an alternative solution that allows orient continuously their management to the competitiveness • Creating a network of sentinels of competitiveness: • Comprising representatives of stakeholders who share the collective value chain. • Attentive to the environment, to the market and the responsiveness of the organization. • Able to assess the quantitative and qualitative aspects affecting collective competitiveness. • Developing a tool that collects in an orderly manner their knowledge and experience • That allow the responsible in a fast and economical way: • Know and compare the visions of the market and the organization of stakeholders. • Determine the importance of factors of competitiveness • Determine the competitive positioning of the organization in each of these factors. • Detecting and measuring the gaps of competitiveness to prioritize actions and allocate resources • Orienting action to improve the implementation of attitudes and good practices to close gaps in competitiveness Enrique Díaz Moreno 4
- 5. Pillars of the Indexfokus methodology: Gestalt: Perceptions “Organization, identification, and interpretation of sensory information in order to represent and understand the environment” The mind understands external stimuli as whole rather than the sum of their parts and It informs us about the environment more realistically , to ensure our survival . Networking: Social Media Social phenomenon that reaches professionals and companies. Huge potential supported by increasingly affordable Technologies. 5 Stakeholder Theory “We are interested to them”. “They are interested in us”. The relationship should be win to win Enrique Díaz Moreno
- 6. Conceptual Model of Indexfokus 6 Improvement strategy Disruptive strategy Gaps of Competitiveness Enrique Díaz Moreno
- 7. The key milestones of the evaluation 1. Determining the “Factors of Competitiveness” 2. Weighting the “Factors of Competitiveness” 3. Calibrating the “Level of competitiveness” in each factor 7Enrique Díaz Moreno
- 8. 8 1. Administration and Management Business: Competence, Values, Strategy, Policy, Transparency, Organization, Social Responsibility, Culture... 2. Infrastructures, Facilities and Basic Services: Safety in supplies of the Materials and Basic Services, Location, Connectivity, Functionality of the Design, Sustainability... 3. Recent Economic Outcomes: Benefits, Cash Flow, Solvency... 4. Basic Labor: Availability, Training, Productivity, Versatility. 5. Middle Management and Technical: Availability of skilled labor, Education Level, Degree of Productivity, Engagement and Responsibility. 6. Business Offer: Quality, Price, Range, Presentation, Brand... 7. Selection and Promotion of people: Nondiscrimination, equal opportunities, merit assessment, compensation, heads protection... 8. Accessibility to Finance: Capital, Credit rating, Lines of Credit, Grant.... 9. Technological, computer and communication development, as essential element for the production and control of the business activities. 10.Dimension. The advantage of being large or small can be important depending on the market and company strategy. 11.Complexity of the Business Model. To be fully aware of the business and to be properly represented in the areas that best observe the developments that happen in the markets, allows to anticipate the trends and to prepare the company for the changes. 12.Innovation: R & D & I (Research and Development and Innovation): The investor commitment to the search for new and better products or services, which allows us to anticipate the answers of the customers’ needs and strengthen the comparative advantages over competitors. The 12 Competitiveness Factors (WEF) Enrique Díaz Moreno
- 9. Weighting “Factors of Competitiveness” 9Enrique Díaz Moreno
- 10. Calibrating in each Factor “Competitive Position” 10 If no weights are set to the statements : Enrique Díaz Moreno
- 11. Individual Competitiveness Indexfokus assesses the competitiveness in two phases corresponding to the two dimensions of perception of any evaluator: 1. Weighting the importance of the Market Competitiveness Factors. 10-15 minutes 2. Calibrating the Competitive Position in each factor: Indexfokus presents 5 Best Practices for each factor, and the evaluator assesses whether they are applied successfully by the organization. 20-30 minutes. 3. Individual Indexfokus: 11Enrique Díaz Moreno
- 12. Stakeholders Matrix 12 Expert J. K. X G. H. X X S. Y. X H. H. X R. M. L. J. X X Enrique Díaz Moreno
- 13. Stakeholder Competitiveness “Expert evaluators” means: Professionals who know our organization and the market in which we compete from their particular approach. “Working with perceptions” means: Experts don’t need to handle special documents, reports or data. 13Enrique Díaz Moreno
- 14. Organization competitiveness Where z collects all Indexfokus of the Groups Enrique Díaz Moreno 14
- 15. The market visions of stakeholders Enrique Díaz Moreno 15
- 16. The competitiveness level of the organization in each factor Enrique Díaz Moreno 16
- 17. Indexfokus chart: The competitiveness gaps 17Enrique Díaz Moreno Hole in F7Dark Zone of Competitiveness
- 18. The hollows of competitiveness sorted from highest to lowest priority give us the main factors on which to act 18 The hollows of competitiveness sorted from highest to lowest priority give us the main factors on which to act Enrique Díaz Moreno
- 19. Best practices pathway in each factor 19Enrique Díaz Moreno
- 20. The Indexfokus graphs: 20Enrique Díaz Moreno
- 21. Strategy: Virtuous Spiral 21 “Focus on priorities, act, measure and start again”. Enrique Díaz Moreno
- 22. Indexfokus is operative and ready to help 22Enrique Díaz Moreno
Editor's Notes
- Good morning dear colleagues. It is a pleasure to me be in this important Forum to present the result of my work in the last three years. Although I am currently teaching strategy and business policy at the Public University of Navarra, my region in the northern Spain, I feel mainly engineer and manager, since I've dedicated over 30 years of my professional life to these matters. Thus, I want to start by saying that what I will introduce you is a result of my experience on the problems I have had to face in complex organizations both public and private, where they converge groups with very different interests. The methodology I am going to present, can be applied to assessment and management of fuzzy concepts, generally integrators of others concepts and which they change over time. All those concepts which we recognize as extremely important in economy or in our society but are impossible to measure.
- One of them is competitiveness. Competitiveness is a concept used worldwide and at all levels. Competitiveness is presented as the solution to all those problems that avoid economic development of our societies and our organizations. But, what competitiveness is? I feature the conclusion of the Head of Labour statistics and competitiveness indicators of the OECD. Obviously by his own professional interest, and resources of his organization he can give much light about this concept and on how to measure it: These are his conclusions: “No consensus about the precise nature of competitiveness”. “Numerous organisations provide competitiveness measures based on own concept and data, whose comparability yet to be confirmed”
- So, we have a serious problem: We do not know to what extent we are competitive nor where to start to improve. Usually we associate competitiveness with sport and we think the market puts everyone in his right place, as in the next Olympic Games we will see whose are the best competitors, but the most important question to compete in my opinion is: How should we prepare us to have the best options to win? In other words, we can not wait the Olympics, we must go well prepared, trained. The problem of a nation, of a territory, sector, cluster or any organization always must be to be prepared to win in the global market and this is a collective and continuous effort involving all those who share that interest. As in sports, in economy there is no a formula to be the best, there is no an evident cause and effect relationship because there are many causes, both physical and emotional, sometimes amazingly mixed to get the results.
- In this context, the purely econometric methods, based on past data, do not seem sufficient to tell us how we must react in front of new competitive advantages of our rivals and nevertheless we need this information to not let ourselves be surprised by them. Yes, it seems to make sense, but how can we get it? The Indexfokus proposal is to harness the knowledge and experience of professionals who make up the stakeholders of the organization. Each interest group observes the market and the organization since their particular approach. Any movement of our competitors in its range will be perceived before for them than for us. If they know us well, they will know to what extent we can and must react. If they keep a win-win relationship with us, they will be the first interested on we react together to maintain strong the value chain in which we participate. Therefore, the first thing we must do is determine the stakeholders of the organization and in each of them the best professionals. If we ask them help us in order to be more competitive, with the promise of not take too much of their time, ensuring them the full confidentiality and to have the final results, we are starting to strengthen our relationships and a new way of management. But yes, the process must be fast but controlled and therefore Indexfokus uses internet.
- With two simple evaluations which don’t take more than 20 minutes, Indexfokus Competitiveness get information, that treated properly will allow us to know and compare the different views of stakeholders on the importance of factors of competitiveness in the market, the competitive position of the organization in each, estimate the size of the gaps of competitiveness in each factor and also found in each of them, good practices and attitudes to develop to try to cover them. Thus, the fundamentals of Indexfokus methodology are these: Stakeholder theory, the perceptions of the experts we select and the fast answer capacity which internet offers us today.
- But, how do relate market and competitive positioning when we work with the perceptions of experts selected?. The idea is this: In this graph, each column represents one of the competitiveness factors. We all know that in each market, some factors are more important than others. In Indexfokus the importance of each factor is represented by the width of its column. Wider means more importance. Furthermore, the height of each column represents the level we have in relation to the best rival in each factor. This simple graph serves to identify the gaps of competitiveness: The surface between the upper base of the column and the highest level of competitiveness represents the competitiveness hole we have in each factor. The bigger the surface, the bigger the gap. We can deduce that the relationship between the surface covered by the columns and the possible surface to cover, is a competitiveness index. The arrows show the two extreme strategies to become leaders in competitiveness: Cover the holes or influence the market by creating new factors or enhancing those in which we are strong.
- Therefore our work to get an index of competitiveness and discover which are our gaps in it is: Define the competitiveness factors. Weight their importance in our market. And to position our organization in each factor, always in relation to the best.
- To choose its Competitiveness Factors, Indexfokus is inspired by the 12 Pillars of Competitiveness of the World Economic Forum. Here we can see those which Indexfokus considers in its evaluations for clusters.
- In order to weight the importance of each of the competitiveness factors, Indexfokus uses this kind of evaluation.
- To determine the competitive position, the height of the column, Indexfokus presents another evaluation, with "good practices or attitudes" which distinguish the best competitor for each competitiveness factor. The evaluator must express his satisfaction about the way in which each good practice is being applied in our organization. Here we can see the kind of evaluation that I am talking about.
- In short: An evaluator who fills the two assessments before, (it means he weights the factors and calibrates the competitive position), provides enough information to determine the level of competitiveness that he gives to our cluster.
- The managers know which groups form part of the value chain of its organization. They know the people who are the most respected due to their knowledge and experience. It is not difficult for the management team build a stakeholder matrix like this to assign the experts to the interest groups.
- Obviously, each evaluator has a point of view, a way of seeing and perceiving our organization and this is important, but what really matters to us is the perception of the his group of interest.
- Load this matrix in Indexfokus tool, is enough to launch the evaluation process, monitoring it and stimulating the collaboration of the invited experts. We will get the visions of the different stakeholders and the general Indices of competitiveness
- Here we can see the different views of stakeholders as to the importance of factors of competitiveness in the market. Analysing this graph, we can find answers to questions such as: We share the same view on the market? Where we see all the major problems? Why we perceive in so different ways in some cases?
- For similar questions we can find answers when we observe the visions that have the stakeholders of our competitive position in each factor.
- Based on these data Indexfokus Competitiveness builds the graph presented them at first. Thus, it is easy to calculate the gaps of competitiveness in each of the factors.
- Indexfokus detects and orders the competitiveness gaps, from the highest to lowest. The graph allows us prioritizing the factors over we should concentrate the resources to increase the competitive level in the most rational way.
- Even more, because of the way Indexfokus has been developed, now it can tell us which good practices we must improve in each factor, taking into account our stakeholders' perceptions.
- Here we have the kind of graphs that Indexfokus gives as results. We can obtain general results, and also by stakeholder, which allows us to compare them. This is a source of valuable information for the manager, which facilitates the preparation of meetings and messages.
- Evaluating and acting under the guidance of the stakeholders, following the Indexfokus methodology allows the organization to enter into a virtuous spiral through competitiveness.
- The Indexfokus methodology has being developed as a tool in the i-cloud and it is ready to take management to a higher, more collaborative, more sustainable level, in tune with the current global market. Thank you for your attention.
- 21. Thank you for your attention.