26 October, 2023, London – New research by AICPA & CIMA, in partnership with the World Business Council for Sustainable Development (WBCSD), has produced a new framework designed to facilitate strategy delivery excellence.
Called the Integrated Performance Management Framework, it:
Focuses on strategy execution and refinement founded on a clear, defined organisational purpose, a robust strategy and effective corporate governance.
Embraces multi-capital, multi-stakeholder and long-term value creation principles. It provides mechanisms for continuous feedback on the performance of strategies and supports their refinement to deliver value creation for a broad range of stakeholders.
Includes components related to leadership, culture, resource management and processes. The application of the framework is ongoing and cyclical, with each component providing feedback loops on the execution of strategy.
Facilitates the provision of management information which drives insights into effective strategic execution, providing data on productivity, functional utilisation and moral hazard risk reduction. It helps drive performance by engaging and empowering employees and building trust.
Up to 90% of a modern company’s value rests in intangible assets¹. Environmental and social capital forms a vital part of the value creation process, and the value creation process is fundamentally driven by people. The framework is taken from phase two of the Integrated Performance Management (IPM) research project, which looks at ways to reorientate organisations to improve their performance in this new environment.
The research report examines why business strategies sometimes fail to permeate through an organisation, and are not executed properly as a result. It encompasses leadership, organisational structure, culture and incentives.
If implemented, the framework should build a performance culture in an environment where people are empowered, trusted and engaged. Everyone in the organisation is clear how the initiatives they work on relate back to the overarching purpose of the business. All employees would be engaged in conversations about strategy to facilitate this understanding. Authority would reside with strategic leaders, and strategic objectives would be owned by ‘Strategic Executive Officers’ (SEOs). These officers would access functional expertise on a supply-and-demand basis in a strong matrix structure.
¹Ocean Tomo, Intangible Asset Market Value Study, 2022, www2.oceantomo.com/l/710293/2022-03-29/6dwh16/710293/1648600589q2zQV1QZ/Ocean_Tomo_IAMV_Study_Report_03_28_22.pdf
Peter Spence, FCMA, CGMA, Associate Technical Director at AICPA & CIMA, said:
“Modern business strategy must incorporate a wide range of capitals, notably environmental and social capital, and it must recognise that most value is driven by people. Our research identified gaps that can open up in this environment between strategic intent and delivery.
To address these issues we created the Integrated Performance Management Framework, which organisations can use to optimise performance and deliver sustainable value to all their stakeholders. It links leadership, culture, resource management and processes together to form a new blueprint for the high performing organisations of the future.”
Pepijn Rijvers, Executive Vice President, Redefining Value, WBCSD, said:
“As much as 90% of a company’s value is now made up of intangible asset, these are the thoughts, experiences and expertise of people in the workforce. It was staggering to us to discover that even in successful companies, many leaders are struggling to make the connection between individuals and the strategic objectives of the organisations.
“Through the IPM Framework, we’ve taken the learnings from our extensive research into leading practice and these distilled down into actions that can be implemented by any organization, irrespective of size, sector or geography.”
– ENDS –
Notes to editor
Integrated Performance Management phase two was conducted in collaboration with the World Business Council for Sustainable Development
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About AICPA & CIMA, together as the Association of International Certified Professional Accountants
AICPA® & CIMA®, together as the Association of International Certified Professional Accountants (the Association), advance the global accounting and finance profession through our work on behalf of 698,000 AICPA and CIMA members, candidates and engaged professionals in 188 countries and territories. Together, we are the worldwide leader on public and management accounting issues through advocacy, support for the CPA license, the CGMA designation and specialised credentials, professional development and thought leadership. We build trust by empowering our members and engaged professionals with the knowledge and opportunities to be leaders in broadening prosperity for a more inclusive, sustainable and resilient future.
The American Institute of CPAs® (AICPA®), the world’s largest member association representing the CPA profession, sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organisations and federal, state and local governments. It also develops and grades the Uniform CPA Examination and builds the pipeline of future talent for the public accounting profession.
The Chartered Institute of Management Accountants® (CIMA®) is the world’s leading and largest professional body of management accountants. CIMA works closely with employers and sponsors leading-edge research, constantly updating its professional qualification and professional experience requirements to ensure it remains the employer’s choice when recruiting financially trained business leaders.
About the World Business Council for Sustainable Development (WBCSD)
The World Business Council for Sustainable Development (WBCSD) is a global community of over 225 of the world’s leading businesses driving systems transformation for a better world in which 9+ billion people can live well, within planetary boundaries, by mid-century. Together, we transform the systems we work in to limit the impact of the climate crisis, restore nature and tackle inequality.
We accelerate value chain transformation across key sectors and reshape the financial system to reward sustainable leadership and action through a lower cost of capital. Through the exchange of best practices, improving performance, accessing education, forming partnerships, and shaping the policy agenda, we drive progress in businesses and sharpen the accountability of their performance.
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