The AICPA & CIMA, in conjunction with the World Business Council for Sustainable Development, unveiled research on a framework to facilitate business strategy development.
Dubbed the Integrated Performance Management Framework, it focuses on strategy execution and refinement based on a clear, defined organizational purpose, a robust strategy and effective corporate governance. The framework includes mechanisms for continuous feedback on performance and supports refinement. Each component provides feedback loops on the execution of strategy. It includes components related to leadership, culture, resource management and processes. The framework aims to facilitate the provision of management information to drive insights into effective strategic execution, providing data on productivity, functional utilization and moral hazard risk reduction.
The framework derives from Phase Two of the Integrated Performance Management research project, aimed at reorienting organizations to improve their performance. The research report discusses why business strategies can fail to permeate throughout an organization and aren’t executed properly. The report talks about leadership, organizational structure, culture and incentives.
“Modern business strategy must incorporate a wide range of capitals, notably environmental and social capital, and it must recognize that most value is driven by people,” said Peter Spence, associate technical director at AICPA & CIMA, in a statement Thursday. “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 organizations can use to optimize 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 organizations of the future.”
The framework aims to build a performance culture where people are empowered, trusted and engaged. All employees would be engaged in conversations about strategy. Authority would reside with strategic leaders, and strategic objectives would be owned by “strategic executive officers” who would access functional expertise on a supply-and-demand basis in a matrix structure.
“As much as 90% of a company’s value is now made up of intangible assets,” said Pepijn Rijvers, executive vice president at the WBCSD, in a statement. “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 organizations. Through the IPM Framework, we’ve taken the learnings from our extensive research into leading practice and distilled them down into actions that can be implemented by any organization, irrespective of size, sector or geography.”
The AICPA & CIMA operate together as the Association of International Certified Professional Accountants and include the American Institute of CPAs and the Chartered Institute of Management Accountants.
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