AICPA & CIMA release new framework proposal on how organisations can deliver their business strategy

New research by AICPA & CIMA, in partnership with the World Business Council for Sustainable Development, 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-tern 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 assets[1]. 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. 

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.

 
[1] Ocean 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

AICPA & CIMA