P.2 Organizational Challenges

Purpose

This Item addresses the competitive environment in which your organization operates and the key strategic strategic challenges that your organization faces. It also addresses how you approach performance improvement and organizational learning. The aim is to understand your key organizational challenges and your system for maintaining a sustainable advantage.

 

Comments

- Knowledge of an organization’s strengths, vulnerabilities, and opportunities for both improvement and growth is essential to the success and sustainability of the business.

With this knowledge, you can identify those products, service offerings, processes, and performance attributes that are unique to your organization; those that set you apart from your competitors; and those that help you to sustain your competitive advantage.

- Understanding who your competitors are, how many you have, and their key characteristics is essential for determining what your competitive advantage is in your industry and marketplace. Leading organizations have an in-depth understanding of their current competitive environment, including the factors that affect day-to-day performance and factors that could impact future performance.

- Sources of comparative and competitive data might include industry journals and other publications, benchmarking activities, annual reports for publicly traded companies, conferences, local networks, and trade associations.

- Operating your business in today’s highly competitive marketplace means you are facing many strategic challenges that can affect your ability to sustain performance and maintain your competitive advantage. These challenges might include your operational costs (e.g., material, labor, or geographic location); expanding or decreasing markets; mergers or acquisitions both by your organization and by your competitors; economic conditions, including fluctuating demand and economic downturns both local and global; the cyclical nature of your industry; the introduction of new or substitute products or services, possibly based on a disruptive technology; rapid technological changes; or new competitors entering the market. In addition, your organization may face challenges related to the recruitment, hiring, and retention of qualified employees.

- A particularly significant challenge, if it occurs to your organization, is being unprepared for a disruptive technology that threatens your competitive position or your marketplace. Examples of such technologies include personal computers replacing typewriters; cell phones challenging traditional phones and pay phones; fax machines capturing business from overnight delivery services; and e-mail challenging all other means of correspondence. Today, organizations need to be scanning the environment inside and outside their immediate industry to detect such challenges at the earliest possible point in time.

- One of the many issues facing organizations today is how to manage, use, and share your ever-increasing organizational knowledge. Leading organizations already benefit from the knowledge assets of their employees, customers, suppliers, and partners, who together drive organizational learning and improve performance.