Strategy formulation and risk management
To assist with strategic planning, SAICA management conducted a comprehensive environmental scan and diagnostic review. Its purpose was to understand SAICA’s current internal state and the external environment, the impact of the COVID-19 pandemic, and to identify key internal and external issues facing SAICA.
The external environment scan was administered by means of a macro-environmental PESTEL analysis and desktop research. The study included an analysis of global and local trends to gain insight into best practices before, during and after the pandemic:
- Pestel analysis
- Global trends
- South African trends
- Responses to the COVID-19 pandemic
The internal environment scan sought to obtain input from all employees. The crafting of the strategy is communicated to relevant stakeholders:
- Survey – employee perspectives
- Diagnostic interviews — focus group (SAICA divisions)
- Diagnostic interviews — leadership
- Diagnostic interviews — the SAICA board
- Members’ perspectives — the council
The new SAICA strategic intent is ‘to contribute to sustainable economies through developing responsible and ethical leaders’. It highlights the ethical component more than before. SAICA has identified four strategic pillars and eight strategic objectives to achieve the strategic intent.
Strategic risk analysis
A risk review was performed by the risk and compliance team as part of the enterprise risk management (ERM) process to review, revise and communicate risks in order to ensure that SAICA’s strategic risk profile is aligned to its 2021−2023 strategic objectives. The SAICA Strategic Risk Register was workshopped to members of management and comments received were considered.
Strategy translation, alignment and funding
The following four strategic pillars were identified:
- Member value
- Relevance and reputation
- Growth and rransformation
- Organisational sustainability
The four strategic pillars are supported by the following eight strategic objectives:
How do we translate our strategy?
The strategy is translated using tools like the strategy map and the balanced scorecard. The strategy map provides a one-page visual representation of all strategic dimensions − that is, strategic pillars, strategic objectives, strategic intent and the outcome thereof. The strategic pillars operate across functions and business units to support successful strategy execution.
SAICA’s 2021−2023 Strategy Map
The strategic pillars and objectives defined in the strategy map are then converted into a SAICA corporate scorecard of measures and targets.
How do we align the organisation strategically?
- Strategy communication CEO Town Hall with SAICA employees, CEO roadshows, other organisational structures.
- Strategy cascading – divisional scorecards The SAICA scorecard will be cascaded to the business and support units in the form of divisional scorecards and the divisional scorecards must be linked to the corporate strategy. Successful strategy execution requires that both business and support units align their strategies to the value creating strategy of the organisation.
- Strategy cascading – personal scorecards From the divisional scorecards, the strategy is cascaded to the employees using the personal scorecards. Employees are the ones who run the programmes / strategic initiatives that execute the strategy. They must understand the strategy and cannot help implement a strategy that they are not aware of or do not understand. They must understand the strategy if they are to successfully link their day-to-day operations with the strategy.
- Strategy execution (initiatives) (launching the strategy into motion)
- Strategic initiatives These are projects/programmes that are designed to help SAICA execute the strategy and achieve its targeted performance. SAICA has identified 24 strategic initiatives to execute the strategy. All eight strategic objectives have strategic initiatives to support them, which means that an impact matrix test (ensuring that all initiatives have a strategic objective to support) was conducted. Strategy execution is realised through execution of the identified strategic initiatives.
- Budgeting for strategic initiatives Business planning process informs the budgeting process and strategic initiatives that support different strategic pillars and objectives will be budgeted for.
Strategy monitoring, strategic tactics refinement and risk review
- Manage strategic initiatives It is critical to monitor, review and evaluate strategic initiatives for effectiveness and contribution to the strategy. Initiatives must be actively managed to track realisation of benefits and implement necessary modifications. Initiatives are where the rubber meets the road in terms of strategy execution.
- Employee performance Performance is monitored on a day- to-day basis at the operational level as per employees’ KPIs, as they execute strategic initiatives. Review is done twice a year, in June and at the end of the year.
- CEO and executive directors’ meetings The CEO conducts monthly strategy review meetings with the executive directors to discuss progress on strategic initiatives. The focus is to comprehend root cause of performance issues, check if we still doing the right things and provide early warning signs. Strategic tactics refinements are discussed.
- MANCO strategy review MANCO meets quarterly to discuss strategy performance; that is, the CEO report and the SAICA scorecard. Such discussions and reports are cascaded throughout the organisation by the relevant executive directors. Risk review is continuously part of strategy execution and strategy monitoring. The organisation’s risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process . The focus is on identifying strategic initiatives that are not on track and to implement necessary modifications. Strategic tactics refinements (if any) are discussed.
- REMCO, AUDCO and the board Quarterly review of the CEO report and the SAICA scorecard by the board subcommittees and the board.
- REMCO and the board End of year: SAICA scorecard, divisional scorecards and employee scorecards get final end-of-year scores. The performance results are linked to incentives as per the relevant HR policies.