Applying Integrated Thinking & Collaboration To Help Grow The Value In Your Business
Last week we discussed the increasing focus on integrated reporting and ESG. We highlighted some specific concepts:
- Integrated thinking - the active consideration by the organization of the relationship between its various operating and functional units and the capitals (financial, manufactured, intellectual, human, social and relationship & natural) that the organization uses.
- Value creation – which occurs when the organization uses its capitals to create outputs that is worth more than its inputs.
- Integrated Reporting – through which businesses can reflect the value that they have created over time, in terms of environmental, social and governance (ESG) aspects, with the aim of providing stakeholders with quality information for better decision-making.
This week we explore how integrated thinking and collaboration can help to preserve and grow the value in your business.
Interconnected information, integrated thinking and improved decision-making
Top performing businesses base their decisions on interconnected information across the various capitals. By actively considering the relationship between the various operating and functional units of the entity and the capitals effected, businesses can apply integrated thinking. Organizations that apply integrated thinking understand that there is no longer a place for silo thinking in the marketplace. They understand that adapting to changes and exercising flexibility is crucial to survival in today’s economy.
Through integrated thinking, these organizations can apply integrated decision-making and related actions which consider the creation, preservation or erosion of value over the short, medium and long term. Creating value is critical to any business. Preserving and growing that value can help to take your business from a state of survival to a state of thriving.
Here are some ways in which you can apply an integrated thinking approach to decision-making:
- Build trust – to share information and ideas, you need trust between leaders and employees. When employees feel engaged, they are more likely to contribute to the organization. This can provide fresh perspectives, which can lead to improved decision-making.
- Consider the non-financial aspects as well – while financial information is key, this can no longer highlight the only value drivers of a business. Balancing financial and non-financial aspects can provide management with a broader view for taking informed decisions.
- Extract relevant data - while most organizations are experiencing an overload of data, it is important to prioritise and process the data received, to extract that which is relevant to the business. Clear context and insight from relevant data can help management to make better informed decisions.
- Encourage ongoing collaboration – breaking down the silos through greater collaboration between different business units and functions can provide added knowledge and context to enhance decision-making.
- Promote medium and long-term thinking – while short term decisions are inevitable, you can encourage decisions that create value over the medium and longer term too. Consider for example, adjusting incentive structures to encourage employees to come up with ideas that extend beyond the short term.
- Engage external stakeholders – understanding what your stakeholders desire can help focus your business strategy to be sustainable over the long term. Regular communication and engagement with stakeholders can help provide a better understanding of what they value in your organization.
- Reflect and reset – learning from past outcomes and decisions can help you re-focus on how to improve going forward. This may include adjusting processes and key performance indicators.
- Be transparent – being open and honest about how and why decisions are made within the business can help improve employee engagement. Transparency helps promote understanding of the business model and the wider strategy being followed. When employees understand, they are more likely to buy into the strategy and the decisions being made.
The value of collaboration in business
As a working practice where individuals and / or business units work together for a common purpose to achieve a business benefit, collaboration can bring value to your business. Successful collaboration includes the following:
- Enthusiasm to find solutions to key business challenges – bringing positive energy into the collaboration helps stimulate ideas on how to tackle the pain points of the business.
- Recognizing that collaborators each bring their own strengths and weaknesses to the table – and building on the best of each team member can promote the value coming out of the collaboration.
- Being accountable and responsible – taking responsibility for mistakes made; acknowledging that there may be a better way to do something than that which you are used to helps you to learn and grow.
- Recognizing the contributions of others – give credit where credit is due.
- Exercising active listening – providing the space for others to share their perspectives can multiply the practical solutions shared in the group for solving problems that the organization may be facing.
Collaboration is ultimately focussed on positive change. Positive change can improve business processes, increase productivity and efficiencies, enhance revenue, reduce costs, and ultimately promote a happy workplace, satisfied customers and sustainable returns for investors.
Making big changes to your operations and process can be daunting but can also help you get keep up with industry trends and get ahead of competitors. Sometimes you just need to make a start by making small positive changes. Eventually, these changes can add up to provide substantial value over the medium to long term.
By collaborating with others, you can take advantage of their expertise – all parties involved can capitalise on the skills and resources of others. Having a broader understanding of other practises and contexts can improve your own decision-making and create partnerships that can elevate your business value. These partnerships can help you every step of the way.
Internal Audit and collaboration within the GrowthSmiths
At the GrowthSmiths, we focus on partnering with businesses, advising them on how to set up an effective control environment, and providing independent assurance on the entity’s systems and processes, risks, responses and internal controls.
We believe in networking, collaboration, digital innovation and transparent communication. Because we aim to bring Internal Audit solutions within reach of all businesses, no matter their size, we offer tailored Internal Audit solutions that add value to business. We believe that the greatest value is achieved through collaboration – so we work with all our other Service Lines to provide context and specialist skills to solutions that will help grow the value in your business.
This article was written by Tania Knoetze, Service Line Leader for Internal Audit.
Find Tania’s service here: https://thegrowthsmiths.com/collections/internal-audit-services