The American Institute of Certified Public Accountants (AICPA) and Chartered Institute of Management Accountants (CIMA) have introduced a new framework aimed at bridging the gap between strategic plans and their execution. The framework, called the Integrated Performance Management Framework, was developed in collaboration with the World Business Council for Sustainable Development (WBCSD).
According to a press release from the AICPA and CIMA, the framework is grounded in a series of core principles. These principles include strategic focus, inclusivity and long-term value, holistic components, and management information. The framework emphasizes the execution and refinement of strategies based on a clearly defined organizational purpose, a robust strategy, and effective corporate governance. It also adopts a multi-capital, multi-stakeholder approach to create long-term value and includes mechanisms for continuous feedback to refine strategies for a broad range of stakeholders. The framework recognizes the importance of leadership, culture, resource management, and processes, with each component feeding back into the overarching strategy. Additionally, it enables the provision of critical data that drives insights into effective strategic execution.
Peter Spence, FCMA, CGMA, Associate Technical Director at AICPA & CIMA, stated, "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. Our research identified gaps that can open up in this environment between strategic intent and delivery."
The framework aims to create a performance-driven culture where people are empowered, trusted, and engaged. It introduces the concept of "Strategic Executive Officers" (SEOs) who align functional expertise based on a supply-and-demand model within a strong matrix structure. The goal is to ensure that individuals are connected to the strategic objectives of the organization.
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 organizations.”
The Integrated Performance Management Framework is set to offer practical solutions for businesses of all sizes, sectors, and geographical locations. It aims to close the gap between strategic plans and real-world execution, a challenge that has often hindered businesses from reaching their full potential. With its comprehensive approach, the framework provides a roadmap for optimizing business strategy execution.
