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Featured Insights
07.06.2024

For almost two months, our country has faced a serious political crisis. By initiating the so-called "Russian law," the government has openly opposed the Georgian people's desire to join the European family and democratic world. This decision was finalized on May 27. Growing up in the Soviet Union, I understand the realities of authoritarianism, restricted freedom, and inequality. Having witnessed and participated in the collapse of the Soviet Union and the building of a free Georgia, I deeply grasp the significance of democracy and European values. Based on experience, I can assess our country's risks and opportunities if the people's will does not prevail in this struggle. This is why all my thoughts and emotions now revolve around our country's fate and this political crisis.


The article addresses the challenges faced by organizational leaders during political crises. In light of current events, I aim to explore and answer several critical questions: What implications does a political crisis hold for leaders of private organizations? How can leaders manage stress effectively? How can they maintain or restore their leadership strength when they themselves are facing difficulties? And, how can they guide their team and organization through such turbulent times?


Challenges of Domestic Political Crisis


 First, we must agree that a political crisis within a country is significantly different from other types of crises, such as an economic crisis or a war with an external enemy.

During an economic crisis, the rules of the business game change, market conditions shift, and the private sector's status quo is altered. Businesses need to recognize the symptoms of a crisis in time, quickly adapt to changes, think creatively, and take bold steps.


In a war, all the factors of an economic crisis are present, with the added threat to organizations and people's lives. Faced with an existential threat, all other threats pale in comparison. Fighting an external enemy stimulates patriotism, unity, and mutual support. In this situation, business interests, ambitions, and goals take a backseat, and leaders focus primarily on the survival of the people and the country.


A domestic political crisis is very different in nature. There may not be an immediate economic or existential threat, but it is a war of values. Values are the foundation of our "self," and our identity and belonging (to relatives, colleagues, friends, or country) are under attack. If the crisis is not overcome in time, there is a long-term risk of an economic crisis, loss of freedom, and existential danger. In such a situation, people may have to fight for survival not against an enemy but with a loved one, as we have seen in recent Georgian history.


Therefore, in my opinion, an internal political crisis is the most difficult situation for leaders. To navigate it, leaders must have great inner strength, caution, and courage.


Leadership strategies


Fear, stress, anger, irritation, emotional agitation, a complete lack of energy, difficulty focusing on work, a feeling of weakness, a sudden desire to fight, the desire to give up everything, a sense of responsibility and shame for one's weakness, calling out to oneself, taking action, and then again fear, stress, anger... Do these emotional roller coasters sound familiar? If so, I'd like to reassure you that this is a natural reaction to the challenges described above. Moreover, this emotional background is common to everyone, not just leaders.

Now imagine an organization where all employees and leaders are in this emotional state... It's a bleak scenario indeed. Every leader realizes that finding a way out of this situation is their responsibility, but the main question is how. How do we lead effectively in such chaos? How do we maintain our emotional equilibrium, clarity of thought, and resilience? More importantly, how can we harness the energy of stress within our organization and transform it into a force for positive change and growth?

Reflecting on these challenges, I've embarked on a personal quest to uncover strategies that enable me to fulfill my leadership duties with clarity and purpose each day. And now, I invite you to join me in this exploration. Let's share our insights, our triumphs, and even our struggles. Together, we can navigate these turbulent waters and emerge as transformational leaders, guiding our organizations through the storms towards calmer shores.


1. Accept Reality: If there is no problem - there is no solution. Therefore, not recognizing what is happening to us—both the current events in the country and our emotional stress—means leaving reality. The first step is to accept reality. We must correctly assess the scale of the crisis, the risks facing our organizations, and the degree of stress on ourselves and our team members. Acceptance of an unwelcome reality serves as the foundation for effective problem-solving.


2. Stay Informed: In times of crisis, staying informed about current developments is imperative for making well-informed and prompt decisions.


3. Prioritize Self-Care: To support others, the leader must be resourceful himself/herself. Leaders often make the critical mistake of focusing solely on solving problems during a crisis and forgetting to take care of themselves. A leader's physical, mental, and emotional well-being is directly related to their resourcefulness. Self-neglect weakens and exhausts the leader, diminishing their ability to make effective decisions. Even amidst high stress, dedicating time to self-care routines can provide surprising strength. For instance, incorporating daily exercise, meditation, or pursuing personal interests can significantly contribute to maintaining physical and emotional resilience.


4. Create A Supportive Environment: Leaders, like everyone else, experience fears, anxieties, and vulnerabilities. During times of crisis, it's essential to surround oneself with a supportive network of individuals who provide strength and energy. Whether it's family, friends, partners, or professional support like psychologists, drawing upon external sources of support is crucial for resilience.


5. Share Responsibility: Effective leadership entails sharing both power and responsibility with the team. Particularly in times of crisis, leaders should not bear the burden alone. Trusting the management team, fostering open discussions about risks and challenges, making collective decisions, delegating tasks, and jointly assuming responsibility for outcomes are vital strategies for navigating crises and managing stress.


6. Empathy and Effective Communication: Internal political conflict is one of the most difficult crises because society is divided and opposed to each other. We should not forget that an organization is also a community—a community united around one idea and goal. Consequently, the division that exists in society is likely to appear in the organization as well (especially in large organizations). If the responsibility for stabilizing society and the situation across the country falls on the government, within the organization, this responsibility rests with the leader and the management team. Therefore, the leader and management team must ensure effective communication within the organization, eliminate conflicts and restore or strengthen trust among employees. This can be achieved by bringing common interests to the fore and relegating differences to the background. For example, “We all want this country to develop”; “We all want more stability and security”; “We are all in this crisis together, and the consequences (both good and bad) will affect everyone”.


7. Leading by Example with Values-Based Decisions: In the context of internal political controversy and such an underdeveloped democracy as Georgia, publicly stating an opinion contrary to the government's position is risky. The leader of any private company is aware of this risk, which is not only related to the potential loss of business or income but also to the jobs and safety of employees. Therefore, leaders who do not share the ruling power's position on the "Law on the Transparency of the Influence of Foreign Powers" (the so-called Russian law) face a big dilemma. If they raise their voice and openly protest the government's decision, they risk their own and the organization's well-being. On the other hand, if they do not speak out or support the ruling force contrary to their beliefs, they lose self-respect and the trust of their employees, ultimately morally destroying the organization.


Advising leaders on this issue is challenging. However, one thing remains clear: leaders will have to make a choice and assume responsibility for the associated consequences

03.06.2024

Uncertainty is the cornerstone that defines the global marketplace and on which it ultimately depends. Conflicts such as political, trade, and social instabilities, among other factors, are known to upset this balance, presenting a challenge to international business. These disruptions could vary from direct supply chain interruptions to direct refusals of the consumption of the company's products, which can produce drastic effects in different corporations. Especially during such periods of uncertainty, communication, and marketing assets are vital instruments in weathering these storms and preserving the corporate image.


Modern Political Risks and Their Impact


For a long time, organizations were primarily concerned with operational risks, or more specifically, with economic and financial risks only. But soon, McKinsey & Company, in its Emerging Risks on the Global Agenda ([valid URL added]), presents political instabilities as one of the upcoming risk management concerns. This paper, informed by interviews with IT executives and the analysis of political risk data, highlights how vital it is for organizations to plan for political disruptions and need to have specified marketing communication plans. Politics, social issues, and the shifting geo-political landscape are key drivers that can challenge supply chains, undermine stakeholders' confidence, and diminish branding. These are some risks companies can face, and a proactive crisis communication and marketing strategy should not be lacking.


Crisis communication, a vital aspect in managing crises, is planning the type, content, channel, and timing of communicating and interacting with stakeholders during crises. This definition is also based on the standards of operation provided by the International Public Relations Association (IPRA), which is recognized as the world's premier association for public relations professionals. It only takes one communication slip during an incredibly volatile political period to significantly harm stakeholder trust and company image. On the other hand, effective communication management is an invaluable tool with little or no adverse effects because the public gets a positive impression of a company's responsible behavior during a crisis.


Critical Considerations for Efficient Crisis Messaging During the Political Hard Periods


Appropriate measures of crisis communication establish the radar for organizations to continue their operations unhampered by the disruptions of storms of a political nature. Here's how companies can establish a foundation for clear and impactful communication: 


Proactive Risk Identification: Businesses must understand politics. They have to adapt and deal with it. For this reason, the different institutions must analyze possible political risks regarding operations to identify weaknesses.


Building a Rapid Response Infrastructure: Crisis communication cannot afford to be slow. Organizations must set up a crisis communication team to react quickly to incipient decisions and disseminate them correspondingly. This team should comprise personnel from different departments, among them public relations, legal, and marketing departments, in case any issues arise. Efficient operational plans for precise and fast reactions should be set and agreed upon beforehand to avoid confusion and the formation of weak links.


Transparency and Empathy in Action: Maintaining and promoting ethical business conduct throughout the crisis cultivates business and consumer goodwill (in line with the communication principles highlighted by the IPR, 2023). For instance, Patagonia, a company famous for being an active voice in environmental issues, seized a political crisis – the U. S government shutdown – to bring to light its dedication to promoting sustainable practices; this is because the company ceased every advertising campaign during the events.


Multi-Channel Communication Strategy: Stakeholders' communication must occur using a comprehensive communication tool kit. The best way is to develop different messages for every social network because each is unique in some way. While a press release can formally announce events, social media is timely, open, and personal, providing status updates.


Crisis management and business continuity


Crisis communication plans can only fulfill business continuity and crisis management. This plan should outline action procedures associated with communication during risk management and supply chain disruption and accommodate protocols for employee safety and disaster response (Disaster Recovery Institute International [DRII], 2023). You can be confident that crisis communication advocates an essential aspect of these strategies, which involves the timely and accurate flow of information to all key stakeholders.


Adapting to marketing plans and strategies during a crisis has become necessary as a managerial strategy. Crisis communication is an inevitable communication activity in organizations, and it should be aligned with marketing communication strategies to keep the masses constantly informed about the firm's brands and products. This may involve:

  • Adapting Marketing Messages
  • Utilizing Social Media for Authentic Engagement
  • Pausing Insensitive Campaigns


Delving Deeper: Crisis communication and marketing are two key aspects organizations must consider, especially when running a business.

The harmonization of crisis communication and marketing during hard political periods are critical strategies that should be employed to ensure reputation management. Here's how businesses can achieve this.


  • Maintaining Brand Voice and Values: Companies must ensure that when communicating during a crisis and with customers in general, they adhere to their brand's fundamental values and tone. Maintaining consistency is an essential factor since it helps people develop trust and credibility in the brand's response to the crisis that is being faced.
  • Corporate Social Responsibility (CSR): Crisis response is another factor that raises the importance of a strong CSR strategy, as it will become a powerful weapon when the company is to defend itself from the negative consequences of the crisis.
  • Building Brand Support Through Transparency: There is a great degree of trust put in companies that are transparent within the climate of crisis communication.


Today's world can be described as vague, with politics constantly volatile. Therefore, everyone should strive to employ an integrated approach to crisis management in the event of such storms.


24.04.2024

"Even the procurement of a simple teapot in our organization requires approval from the director," shared a manager of a prominent Georgian company during an interview conducted as part of an organizational diagnosis. Micromanagement and a lack of delegation are pervasive challenges among senior and middle managers. This management approach is one of the foremost barriers to organizational advancement. Let's explore its adverse effects on 3 levels: the employee, the manager, and the organization.


Employee Level:


Reduced Responsibility: Under constant control and task instruction, employees lose a sense of ownership over their activities. Consequently, they feel less accountable for the outcomes.

Decreased Work Quality: Micromanaged employees often lack a comprehensive understanding of their tasks' broader context and purpose. Without clear guidance from their manager, they struggle to deliver high-quality work that aligns with organizational goals.

Impeded Growth: When employees are inundated with detailed instructions rather than given tasks matching their skill level, their professional development suffers. Additionally, micromanagement discourages risk-taking and learning from mistakes, hindering personal and career growth.

Demotivation: Research underscores the importance of feeling valued and having autonomy in the workplace for maintaining high motivation levels. In micromanaged environments, employees feel neither important nor free within their areas of expertise. This lack of recognition and autonomy breeds dissatisfaction and can lead to increased toxicity in the workplace or even prompt employees to seek opportunities elsewhere.


Manager Level:


1. Stress and Burnout: Micromanagers often find themselves overwhelmed by the perceived irresponsibility of their team members. They bear the weight of decision-making alone, wondering why the burden of results seems to rest solely on their shoulders. This constant pressure inevitably leads to heightened stress levels and eventual burnout.

2. Relationship Deterioration: The stress and burnout experienced by micromanagers frequently spill over into their interactions with team members. Feelings of unfairness, anger, and frustration brew, souring the manager-employee dynamic. This can manifest as subtle hostility or open aggression, eroding trust and damaging relationships within the team.

3. Stunted Development: Caught in the cycle of micromanagement, managers have little time or energy to focus on their growth and development. Their incessant need for control precludes the exploration of new skills or opportunities for advancement. Additionally, their perceived indispensability impedes any possibility of transitioning to new roles or seeking promotion, leading to their career stagnation despite their desire for change.


Organizational Level:


1. Decreased Productivity: Micromanagement stifles employees' ability to fully leverage their skills and potential, resulting in suboptimal performance. Moreover, by burdening managers with excessive responsibility and control, the organization inadvertently creates a bottleneck that hampers its effectiveness. Consequently, overall productivity suffers, impeding the organization's ability to achieve its goals.

2. Diminished Creativity and Innovation: Under the constraints of micromanagement, employees find themselves spending more time awaiting directives from managers rather than exploring new ideas or initiatives. This stifling environment fosters a culture of passivity, where individuals hesitate to take initiative for fear of reprisal. Consequently, creativity is stifled, and innovative solutions remain untapped, hindering the organization's ability to adapt and thrive.

3. Unhealthy Organizational Climate: Micromanagement erodes trust between employees and managers, fostering mutual dissatisfaction and undermining collaboration. Low productivity and dissatisfaction with outcomes become the norm, fueling both, silent and open conflicts, within the organization. This toxic atmosphere becomes a daily source of stress for both - managers and employees alike, sowing discord and impeding progress.


However, despite the evident drawbacks of micromanagement, why do managers persist in adopting this leadership style? Based on my observations, micromanagement stems from three primary factors:

1. Belief: Managers strongly believe that constant oversight and task delegation are essential for ensuring work quality and achieving optimal results. They presume that by permanent monitoring and assigning tasks, they can maintain control and uphold standards.

2. Desire: Micromanagers harbor a deep-seated desire to feel indispensable and valued within the organization. Consciously or unconsciously, they consistently emphasize their importance, often expressing sentiments such as, "No one can do it like I can" or "Nothing gets done without me." These expressions betray an underlying craving for security and recognition.

3. Fear: Micromanagers are driven by an underlying fear of competition and the potential loss of their position within the organization. Subconsciously, they dread the idea of work progressing without their direct involvement, questioning their relevance and necessity. This fear of being sidelined or replaced fuels their need for control, leading them to tightly restrict their employees' areas of responsibility.


In essence, micromanagement is fueled by a combination of deeply ingrained beliefs, desires for validation, and subconscious fears. These factors perpetuate a cycle of control and restriction, hindering both individual and organizational growth.


Ultimately, the key lies in transforming a micromanager into an effective leader. If you resonate with the aforementioned insights, the roadmap to this transformation becomes clearer: To instill the art of delegation in managers, we must first address their underlying beliefs, desires, and fears.


The initial step entails guiding them to RECOGNIZE the detrimental impacts of micromanagement on themselves, their teams, and the organization as a whole. By illuminating these losses and negative effects, we pave the way for a paradigm shift.


Subsequently, we must present an alternative reality — a VISION of the possibilities that emerge once liberated from the confines of micromanagement. Helping managers envision a future where they play a more strategic and influential role fuels their motivation to relinquish control and foster the growth of their team members and successors. Encouraging them to visualize themselves in elevated positions or more engaging roles ignites the drive to pursue their development path fervently.


Lastly, consistent and tailored SUPPORT is paramount in nurturing their journey toward effective leadership. Equipping them with the necessary knowledge and skills combined with ongoing guidance and mentorship ensures they navigate the transition with confidence and efficacy. By embracing this holistic approach, we empower micromanagers to shed their restrictive tendencies and emerge as visionary leaders who inspire and empower their teams to achieve greatness.



15.04.2024


"Better three hours too soon than a minute too late." - William Shakespeare



Thinkers in literature and philosophy have long pondered the importance of seizing the right moment. From the Stoic reflections of Seneca to the existential philosophy of Jean-Paul Sartre, the question of when to act has preoccupied thinkers for centuries. In today's rapidly changing business landscape, where every moment holds the potential for opportunity or stagnation, Shakespeare's timeless phrase takes on added meaning, especially when considering the main question: When should organizations start digital transformation?

 

Digital transformation has evolved from being a buzzword to a crucial strategy for businesses aiming not just to survive but to thrive in an increasingly competitive environment. The digital age has ushered in unprecedented changes in consumer behavior, technological advancements, and market dynamics, making adaptation imperative for any organization aspiring to remain relevant.

Customers now demand seamless online experiences across various touchpoints. Whether it's purchasing a product, accessing customer support, or engaging with content, expectations for convenience, personalization, and speed have soared. Businesses that fail to meet these expectations risk losing market share and customer loyalty to more digitally adept competitors.


Furthermore, in today's data-driven world, insights derived from analytics are invaluable for making informed decisions. Competitors leveraging data analytics gain a competitive edge by understanding customer preferences, optimizing operations, and identifying emerging trends.


Moreover, Rapid changes in technology, consumer preferences, and market dynamics require businesses to adapt swiftly to stay ahead of the curve. Traditional, rigid business models are increasingly being replaced by flexible, agile frameworks that enable organizations to respond promptly to evolving circumstances and seize new opportunities.


One common misconception is the belief that there exists a "perfect" moment for digital transformation. However, waiting for ideal conditions only serves to hinder progress and puts businesses at risk of falling behind. As emphasized in the ACT, without continuous progress, regression is inevitable. Organizations must adopt a proactive mindset and embrace digital transformation as an ongoing journey rather than a one-time event.



Here's why the time to act is now:



Strategic Positioning: Early adopters of digital transformation gain a significant advantage. They establish themselves as industry leaders, attracting top talent and refining their digital strategies before their competitors catch up. By implementing transformation early, organizations can position themselves as innovators and not just follow the pace of the industry, but set the pace for the industry in which they operate.


Ensuring Your Business's Resilience for Tomorrow: Embracing digital transformation empowers organizations with the capabilities and flexibility to adapt to future disruptions and harness the potential of emerging technologies. By proactively embracing change, organizations can maintain a competitive edge, foreseeing changes in the market landscape, and utilizing innovative technologies to foster enduring expansion.


Enhanced Customer Experience: Today's customers expect personalized interactions and seamless digital experiences. Digital transformation allows you to leverage data analytics to understand customer needs and tailor offerings accordingly, fostering loyalty and boosting brand reputation. By investing in digital capabilities early, organizations can deliver the tailored experiences that customers crave, building lasting relationships and driving long-term success.


"Three o'clock is always too late or too early for anything you want to do,"- Jean-Paul Sartre


"Three o'clock," which metaphorically represents any given moment, emphasizes that the perception of time is deeply context-dependent. It highlights that what may be an ideal moment for one may be completely inadequate for another. This subjectivity prompts us to reconsider our relationship with time and recognize that the meaning of time lies not in its objective measurement, but in its interpretation. In business terms, rushing into digital transformation without proper preparation can be as damaging as procrastination. Blindly following industry trends or deploying technologies without a clear strategic roadmap can lead to wasted resources, disjointed processes, and missed opportunities. Furthermore, artificially accelerating transformational change before the organization is culturally and/or operationally ready leads to resistance to change and alienation among stakeholders. Ultimately, this negatively affects long-term corporate sustainability.


Therefore, the decision to embark on digital transformation should be informed by a comprehensive understanding of the organization's current state, future aspirations, and competitive landscape. It requires careful assessment of internal capabilities, external market dynamics, and technological trends. Moreover, it demands strategic vision, effective change management, and cross-functional collaboration to navigate the complexities of transformational change.


While digital transformation is a marathon, not a sprint, taking that crucial first step is paramount. Here's how to get started:


Strategic Alignment: Formulating a strong digital business strategy is crucial for the success of digital transformation. A strong digital strategy ensures consistency and synergy across all operational aspects of a business. This integration goes beyond simply digitizing processes; it involves a shift in strategic thinking to leverage digital tools, strengthen core competencies, and create value.


It is important to assess the company's digital strategy in alignment with global business objectives, ensuring that digital initiatives are seamlessly integrated into the overall business strategy. Additionally, it is necessary to evaluate the adequacy of budget allocation and the ability to adapt the business model to effectively capitalize on digital opportunities. Taking a holistic approach like this ensures that a company's digital strategy becomes a catalyst for sustainable growth and competitive advantage.



Digital Maturity Assessment: Assess a company's readiness for digital transformation across various dimensions of the organization, including leadership and governance systems, digital literacy, technology infrastructure, data management, customer interaction, and more. This assessment will enable the organization to pinpoint areas in need of improvement and implement targeted interventions to enhance capabilities and minimize the risk of digital transformation failure.


Opportunity Analysis: Conduct thorough market research and competitor analysis to identify emerging opportunities and potential obstacles. Proactively anticipate industry trends, consumer preferences, and regulatory changes to make well-informed strategic decisions.


Digital Transformation Team: Formulate a team comprised of experienced individuals with a clear vision to spearhead the transformation process. This may involve nurturing internal talent or collaborating with external digital transformation specialists.


Change Management: Effective change management plays a critical role in driving the success of any digital transformation initiative. Developing a robust change management strategy is paramount for fostering organizational alignment, mitigating resistance, and nurturing a culture of innovation. In today's rapidly evolving technological landscape, the ability to adapt to change emerges as a critical differentiator for organizations seeking to thrive. As a representative of the Big Three management consulting company, McKinsey & Company's latest campaign titled "It's never just tech" illustrates the core principles of effective digital transformation management. It emphasizes that digital transformation is not solely about introducing new technologies, but rather about fundamentally transforming how organizations operate and how people work. By emphasizing the human dimension of transformation, the campaign underscores the pivotal role of cultural and behavioral factors alongside technological advancements.


In conclusion, the ever-changing business landscape demands agility, innovation, and data-driven solutions. Organizations that delay this process are missing out on opportunities. The time to act is now. By embracing digital transformation early, organizations can gain a competitive advantage, ensure business continuity, and improve customer experience. However, success lies not in blindly following industry trends, but in developing a strategic roadmap tailored to the unique needs and goals of the organization.


As Jean-Paul Sartre said, "Three o'clock is always too late or too early for what you want to do." The right time for digital transformation differs for each organization. Rushing this process without preparation may lead to failure. Therefore, organizations must find a balance between responding rapidly to change and being adequately prepared to ensure success on the digital transformation journey.

08.04.2024

Just as individuals retain memories of significant events, organizations too possess a collective memory that shapes their present and future trajectories. Whether marked by triumphs or tribulations, these experiences become ingrained within the organizational psyche, profoundly influencing its evolution. This article delves into the realm of organizational trauma, shedding light on how certain experiences can hinder transformative growth.


Like individuals, some organizations glean wisdom from their encounters, while others remain ensnared by unaddressed trauma. Today, we explore instances where organizational trauma manifests as a barrier to progress and development.

Common Forms of Organizational Trauma:


  1. Partner conflicts: Conflict between partners often catalyzes significant organizational upheaval. At times, this conflict runs so deep that it results in the polarization of employees into opposing camps and eventual separation. Even after the resolution of partner conflicts, lingering traces of discord and mistrust among teams within the organization are not uncommon.
  2. Leadership Transitions: The upheaval caused by changes in leadership can instill fear and uncertainty, impeding both organizational and individual momentum.
  3. Reorganization: Significant structural changes, such as mergers or reorganizations, evoke feelings of instability and insecurity among the workforce
  4. Financial Crisis: It is often the case that companies are grappling with the lingering effects of the financial crisis over an extended period. Despite witnessing improvements in their financial standing, these companies frequently find themselves entrenched in a perpetual 'survival mode,' unable to transition into a proactive 'development mode.' Consequently, their capacity for innovation, product development, and overall business growth is severely hindered.
  5. Workplace Incidents: Tragic events, such as workplace injuries or fatalities, cast a long shadow over organizational culture, eroding psychological safety.
  6. Harassment and Discrimination: Instances of harassment, mockery, violence, and discrimination not only inflict trauma upon the individuals targeted but also sow seeds of fear, conflict, and hostility throughout the organization. Similarly, cases of favoritism can exert equally detrimental effects. Such preferential treatment isn't easily forgotten within organizational settings and frequently permeates across all levels, establishing itself as the norm and fostering the cultivation of a toxic culture.
  7. Leadership misconduct and unethical behavior - Unethical conduct by a leader has the potential to erode trust across the organization, instilling feelings of betrayal among employees. In such instances, not only are the company's values undermined, but also faith in its growth and promising future diminishes. This, in turn, triggers an exodus of valuable employees and fosters profound demotivation among those who remain, ultimately resulting in the degradation of the company.
  8. Critical events that result in significant reputational or financial damage to the organization – E.g. large-scale fraud, negative public reactions towards the brand or its communication efforts, or substantial fines imposed by regulatory bodies - often have a lasting impact on the organization. In such cases stress levels among employees escalate, giving rise to heightened mistrust, mutual accusations, and confrontations. Organizations that struggle to effectively manage crises often adopt a "victim" mentality, fostering pervasive distrust and relying on control and micromanagement as dominant management strategies.

Management within organizations frequently fails to recognize or acknowledge the existence of these traumas. The most effective approach to enhancing organizational awareness, akin to individual introspection, is through regular reflection. Organizations that prioritize self-reflection, possess well-honed analytical and evaluative tools, and foster a healthy organizational culture where "learning from mistakes" is embraced, are adept at identifying significant events associated with traumatic experiences.


In practice, instances occur where the management team's evaluation of different events significantly diverges. For example, decisions such as product discontinuation, company rebranding, the addition of new management personnel, or changes in leadership may be perceived positively by some team members while deemed irreversible mistakes by others. Such contrasting evaluations pose challenges in reaching consensus on future visions and strategies. Therefore, it is essential for the management team to reconcile differing opinions, thoroughly evaluate events from multiple perspectives, and ultimately unite around a singular vision to drive the company's progress.


In summary, much like individuals, organizations are susceptible to traumatic experiences. While it's crucial to prioritize risk prevention, it's also essential to acknowledge that eliminating all potential internal and external risks is practically unattainable. So, what's the solution? We believe, alongside risk mitigation efforts, fostering organizational resilience and a willingness to learn from adversity is paramount.


Every trauma comprises two components: pain and experience. Reactive organizations dwell on the pain, succumbing to prolonged fear and mistrust, whereas proactive entities swiftly rebound from adversity, leveraging their experiences to fuel growth and bolster resilience. By embracing challenges as learning opportunities, organizations can transform painful events into valuable experiences that fortify their foundations and propel them forward.

27.03.2024

“How could they see anything but the shadows if they were never allowed to move their heads?”
― Plato, The Allegory of the Cave



In the cryptic corridors of Plato's allegory of the cave, where shadows dance upon the walls, lies a profound metaphor for the journey from obscurity to enlightenment. Similarly, in the realm of commerce, businesses embarking on the path of platform models traverse a transformative odyssey, breaking free from traditional silos to sculpt interconnected ecosystems that unveil a spectrum of new opportunities.


The allegory of the cave, in which chained prisoners mistake shadows for reality, resonates in the world of digital transformation. Traditional businesses, siloed and internally focused, often lack understanding of the transformative potential of platform models. This article draws inspiration from Plato's metaphor and explores the complexities of platform success in today's digital landscape.


Delving into the academic realm, the concept of digital platform ecosystems emerges as a cornerstone of modern business dynamics. Unlike traditional linear models, where value is created through the production and distribution of goods or services, a platform business model serves as a facilitator, connecting multiple groups of users to create value for each other. Defined as interconnected networks of producers, consumers, and third-party developers, these ecosystems function as vibrant marketplaces where value creation and exchange flourish. Through the orchestration of data, resources, and services, digital platform ecosystems catalyze innovation, foster collaboration, and unlock new avenues of growth.

Platform-based business models encompass a range of specifications that differentiate them from traditional business models. Here are some key specifications, supported by citations:

Network Effects: One of the defining features of platform models is the concept of network effects. As more users join a platform, the value for all participants increases exponentially. (Parker et al., 2016) In scholarly discourse, network effects are regarded as pivotal for the triumph of platforms, fostering a cyclical pattern of expansion and user involvement.

Multi-sided Markets: Unlike traditional businesses that primarily serve a single type of customer, platform-based models often cater to multiple distinct user groups, known as multi-sided markets. (Evans & Schmalensee, 2016).

Data-driven Insights: Platforms are fueled by data, enabling them to gain deep insights into user behavior, preferences, and trends. This data-driven approach empowers platforms to personalize experiences, optimize operations, and innovate continuously. (McAfee & Brynjolfsson, 2017). Furthermore, advancements in artificial intelligence (AI) and machine learning enable platforms to extract actionable insights, predict user behavior, and automate decision-making processes, thereby delivering unparalleled value and driving competitive differentiation.

Ecosystem Orchestration: Successful platform-based models excel in orchestrating ecosystems of complementary goods, services, and stakeholders. This orchestration involves designing interfaces, establishing rules, and fostering collaboration among participants. (Zhu et al., 2019).

APIs and Openness: Platforms often embrace openness through Application Programming Interfaces (APIs), allowing third-party developers to build upon the platform's infrastructure and create innovative offerings. This openness fosters creativity, accelerates innovation, and expands the platform's capabilities.


These specifications collectively define the essence of platform-based business models, showcasing their unique characteristics and competitive advantages in the digital landscape.


The Journey of Business Transformation through Platform Models


Breaking Free from Silos

Traditional businesses often operate in silos, with little interaction between departments and a focus on internal processes. This can lead to inefficiencies, a lack of innovation, and difficulty meeting the evolving needs of customers. Platform models, on the other hand, are designed to facilitate interaction and collaboration between different groups of users. This creates a more dynamic and innovative ecosystem where businesses can leverage the collective intelligence and resources of their users to create new value.


Finding equilibrium between algorithmic regulation and crafting personalized user experiences.

Unlike the single torchbearer in the cave allegory, successful platforms use sophisticated algorithms as conductors, orchestrating complex user journeys. A prime illustration of this is the implementation of recommender systems, which tailor the user experience and enhance overall satisfaction. Netflix's recommendation engine is perhaps the most well-known and widely used recommender system. It uses an algorithm to analyze a user's viewing history, rating, and search behavior to suggest movies and TV shows that the user is likely to enjoy.

Effectively managing platform dynamics, harmonizing the varied needs of stakeholders, and proactively mitigating risks necessitate astute leadership and strategic insight. Furthermore, fostering trust, transparency, and equity within the ecosystem is imperative for cultivating sustainable growth.

Platforms strive to create seamless experiences for customers, aiming to remove obstacles and optimize interactions to enhance satisfaction and loyalty. However, alongside this goal, there is a need for algorithmic governance. Platforms rely on algorithms to moderate content, manage transactions, and mitigate risks. Yet, excessive use of these systems can worsen the user experience, while insufficient regulation may jeopardize data protection and security. Therefore, platform operators must strike a balance between ensuring security with algorithms and delivering the best user experience. Achieving this balance requires platform developers to consider user needs, legal regulations, and ethical aspects carefully


Designing for User-Centricity

Designing for user-centricity is a pivotal aspect of successful platform models, rooted in the principles of empathy and understanding in the digital era. Just as the allegory of the cave underscores the pursuit of truth and enlightenment, businesses transitioning to platform models must embark on a journey to uncover the profound needs and motivations of their users. By placing users at the core of the design process, businesses can craft experiences that resonate deeply, fostering engagement, loyalty, and meaningful interactions.


Leading the Transformation


In an era defined by technological advancement, the transition from conventional to platform-driven models presents businesses with a definitive route to prosperity and expansion. This strategic evolution necessitates a systematic approach centered on three fundamental components:


  • Embrace a Platform Mindset: The journey towards platform success begins with a fundamental shift in mindset. Organizations must transcend traditional, linear thinking and cultivate an ecosystem mindset where value is co-created by a diverse array of stakeholders. Whether it’s creating new revenue streams, fostering ecosystems, or harnessing the power of data and AI, platform models offer a blueprint for innovation and agility in an increasingly interconnected world. By adopting a platform mindset, businesses can unlock new opportunities, forge deeper relationships with customers, and chart a course towards sustainable success in the digital age.
  • Master Platform Design: A deep understanding of platform design principles is essential for organizations seeking to thrive in the digital landscape. This encompasses the creation of dynamic, two-sided marketplaces that facilitate seamless interactions between producers and consumers. Moreover, mastering the art of incentivization and network effects is paramount for cultivating a vibrant and self-sustaining ecosystem. Through meticulous planning and strategic execution, businesses can unlock the full potential of their platform and position themselves as industry leaders.
  • Become an Orchestration Expert: Effective management and orchestration are critical components of platform success. Organizations must develop the capabilities to navigate the complexities of their ecosystem, balancing the needs of various stakeholders while maintaining operational efficiency and scalability. This involves establishing clear governance structures, fostering trust and transparency, and leveraging data-driven insights to drive informed decision-making. By serving as effective orchestrators of their platform ecosystem, businesses can create value for all participants and drive sustainable growth over the long term.


Platform business models represent a paradigm shift in the value creation equation of the digital economy. Leveraging networks, ecosystems, and data, platforms have the potential to not just drive business growth, but to transform entire industries. However, unlike Plato's cave, the digital landscape is a dynamic ecosystem in constant flux. Platform success isn't a one-time disruption, but a continuous performance demanding constant adaptation.




Rohn D., Bican P. M., Brem A., Kraus. S, Clauss Th. (2021) Digital platform-based business models – An exploration of critical success factors, Journal of Engineering and Technology Management, Volume 60.

Parker, G., Van Alstyne, M. W., & Choudary, S. P. (2016). Platform revolution: How networked markets are transforming the economy--and how to make them work for you. W. W. Norton & Company.

Evans, D. S., & Schmalensee, R. (2016). Matchmakers: The new economics of multisided platforms. Harvard Business Review Press.

McAfee, A., & Brynjolfsson, E. (2017). Machine, Platform, Crowd: Harnessing Our Digital Future..

Zhu, F., Iansiti, M., & Lakhani, K. R. (2019). Competing in the Age of AI. Harvard Business Review Press.

Latest News
May 21-23, Tartu, the European Capital of Culture, hosted the 10th consecutive e-Government conference, which is annually organized by the Estonian E-Governance Academy.Over 500 participants from 67 countries around the world engaged in the event. The conference featured 9 sessions and 9 keynote speeches that addressed the following issues:1. Digital Success: Ensuring that everyone has access to public services and can equally participate in decision-making processes.2. Education: Unlocking potential and opportunities for society to enhance public services and policies.3. Cooperation: Emphasizing daily collaboration, active listening, mutual learning, and enjoying the process together. Sophio Chachanidze, Partner of ACT, and Giga Chitishvili, Democracy and Good Governance Portfolio Lead at ACT, were engaged in the event.Our team is dedicated to advancing the electronification of state services across Central Asia and the Eastern Partnership regions. The recent conference provided an extraordinary opportunity for participants to exchange lessons learned and share the latest trends in international practices related to e-governance initiatives. This experience empowers our team to provide timely consulting and result-oriented intervention mechanisms for organizations initiating change in our target countries and beyond.
05.06.2024
On November 10, the Georgian Institute of Public Affairs (JIPA) organized a panel discussion: “Research industry in Georgia: challenges and development prospects.” Representatives of public and private organizations, research companies and scientists took part in the discussion. One of the speakers at the panel discussion was Natalya Kvitsinashvili, executive director and managing partner of ACT Research. The purpose of the discussion was to discuss with the participating parties the current situation, problems and opportunities for the development of the research industry in Georgia, taking into account global trends. The discussion began with the topic of research transformation - the speakers assessed what the research industry was like many years ago, when it was necessary to explain to society and business the overall value of research, clearly convey the benefits of research to both government organizations and the non-governmental sector. According to the panelists, today the research industry is at a different stage of development, its importance and benefits are well understood by everyone who wants to make data-driven decisions and strategically develop their company or organization. Perception of the benefits of research is high even at the government agency level, and research has become an integral part of developing future policies and standards in various fields. During the discussion, the speakers focused on the current market situation, discussed issues of data processing and publication, the importance of obtaining and publishing open data, as well as specific tasks of the research industry - increasing the competencies of researchers and providing future researchers with practical knowledge in the learning process. “Over the past decade, the global research market has undergone a significant transformation. Among them, the role of the researcher as a profession has changed. If previously it was enough for a qualified researcher to know research methodology, a modern researcher requires knowledge of the field/industry of the subject being studied, even requiring expert-level knowledge to a certain extent,” noted ACT Executive Director Natalia Kvitsinashvili during the discussion. The discussion continued with a discussion of current trends in the labor market: according to the panelists, the demand for specialists working in the research industry has increased worldwide; Along with data collection, processing and analysis skills, the digital era has increased the demand for digital skills among professionals, which remains a challenge in terms of industry development in Georgia. According to the speaker of the discussion, director of the Professional Skills Agency Tamar Kitiashvili, “there is a trend towards updating creative skills, and in the long term, it is specialists with such skills that will become the most in demand on the labor market". It was the unanimous opinion of the panelists that the topics raised during the discussion should form the basis for continued discussion and regular meetings in the future, where industry experts, parties involved in research and academic representatives will continue to discuss opportunities and ways of developing the industry.
13.11.2023
On November 8, a joint conference of the United Nations Association of Georgia (UNA) and the World Federation of United Nations Associations (WFUNA) The Partnership for Impact Tbilisi Conference: from Blueprints to Breakthroughs  took place. The conference was opened by the President and Secretary General of the World Federation of United Nations Associations, Dr. Sean Chen and Aziel-Philippe Gaulandris. They emphasized the importance of the conference and noted that global problems can only be solved through such multilateral cooperation. The conference included a panel discussion "The Role of Partnerships in Advancing Gender Equality", where attention was focused on the multifaceted aspects of gender equality and women's empowerment. One of the Key-note speakers speaker on the panel was Tinatin Rukhadze, founder of ACT, business leader and management consultant, who spoke on the topic "From Self-Doubt to Success: Empowering Women." Tinatin Rukhadze spoke about the problems and common barriers that women often face. Panelists emphasized the role of gender equality for global prosperity. They also spoke about the need for women to actively participate in public life, which they said would create more stable societies in the world. In addition, special attention was paid to the importance of the main UN documents protecting women's rights. The panellists also emphasized the need to support women to break the “glass ceiling“ and the importance of training women in technology. Speakers of the panel Sophie Torelli Chironi, Geneva Directorate General, CSO Liaison; Rachel Weston Eschenbacher, Regional Policy Specialist on Political Participation and Governance, UN Women Regional Office for Europe and Central Asia; Tinatin Rukhadze, Vision Lead, Founding Partner, Analysis and Counseling Team (ACT); Tamara Zakariadze, Head of CSR, Liberty Bank; Nino Nanitashvili, Co-Founder and Mentor, Georgia Startup Pre-Accelerator. The panel was moderated by Catharina Bu, Secretary General, UNA Norway.
09.11.2023
Three new countries on the international map of ACT projects. The research and management consulting company ACT is already represented in 34 countries. As part of the World Justice Project's Rule of Law Index® 2023, the ACT work area has been expanded to include the Eastern European and Baltic countries and Latvia, Lithuania and Poland have been added to our list of work countries. Working in the Baltics is a new stage in ACT's international development, with new countries and experience, and an important step towards the internationalization of services. Strengthening representative and partner networks in already involved countries and geographical expansion towards Central Asia and Eastern Europe continues to be a strategic objective of ACT and a main goal in the coming years.
06.11.2023
Within the framework of the project “Strengthening social protection in Georgia,” on October 26 a conference was held, organized by Expertise France, at which ACT analyst Ketevan Antadze and senior consultant Natia Rukhadze presented the main findings of the study. on issues of social protection of the population. As part of the ACT project, two studies were carried out: • Study of the experience and attitude of the population towards social protection issues in Georgia. • A study of the knowledge, experience and attitudes of recipients of social service agencies towards social protection issues in Georgia, the main focus of which was to analyze experiences related to social protection programs in relation to data from a baseline survey that was conducted in early 2022, although the survey Attitude and awareness components were also included. The goal of the Strengthening Social Protection in Georgia project was to support the Government of Georgia, government and civil society organizations in the field of social services, the development of evidence-based policies and the expansion of rights to social protection. The project was implemented in Georgia by Expertise France and the Czech Development Agency with financial support from the European Union.
30.10.2023
On October 7, ACT held a workshop on strategic business planning to strengthen the SME sector within the framework of social responsibility. The meeting was attended by executive directors and founders of enterprises. Workshop participants had the opportunity to work with ACT's strategic consultants to evaluate their company's current business model and identify factors influencing their business performance. As a result of the workshop, the participants developed a vision for the long-term development of their business and corresponding effective strategies. The working session was led by ACT founder, business leader, management consultant and executive coach Tinatin Rukhadze.
09.10.2023
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