In a series of interviews, I explore the approaches of different business leaders (all chartered accountants) to strategy. This month I was in conversation with RACHEL NKGODI, deputy group chief financial officer at Alexander Forbes
During our conversation, Rachel Nkgodi highlighted various important and practical aspects relating to strategy.
The practical aspects of strategy
Strategy centres people’s efforts and creates
a focus on requirements
‘Strategy centres people’s efforts. Put simply, strategy is the roadmap that lays out the desired state or goal and clearly outlines the priorities, activities, capabilities and enablers required to get there.’
She continued by elaborating on the enablers that business requires: ‘Whether it’s technology, the right people, or the right processes, it all has to align with the specific activities needed to ensure that one is on the trajectory towards the desired state or goal.’
Anchor strategy in purpose
‘For many organisations, purpose is found in what they want to be to their clients or customers, communities and the environment. It is therefore important to set the strategy around that purpose to create a holistic value proposition. For me, the starting point is that purpose: why are we doing this? You have to anchor strategy in purpose,’ she said.
‘Your game plan is driven by your purpose. For example, when you are playing chess, you play to win. Your pieces are not standing still, you always have to think of your next several moves. There will always be factors surrounding the game that will influence your next move − be it competitors, regulation, macro-economic factors − you always need to be flexing your strategy for these elements. Your game plan will shift as new things are introduced. But essentially your aim to win will always be driven by your purpose – the desired goal will always be the anchor point.’
Clearly articulate what lies at the core of
your strategy
Rachel elaborated on this point by using an example: ‘A key pillar of our strategy is being an advice-led business creating beneficial outcomes for our members and clients – in strategy execution, one has to articulate clearly what this means. For us, this means being fully aligned to operate “as one Alexander Forbes” in how we maintain key client relationships, engage with members and providing excellent service for beneficial outcomes for our members and clients. Of course, there are various activities that underpin this,’ she explained.
‘We are clear that the client is at the centre of everything we do. Therefore every effort of this strategic pillar is centred on our advice led and measurable outcomes value proposition.’
Joining the dots between the formulation
of strategy, the execution of strategy and the measurement of strategy is key
‘It’s just as important to outline how you are going to track and measure contributions as a result of the strategy deployed as it is to formulate strategy. You need to carefully establish the key measurement matrices in your business that are key indicators of whether you are moving forward or backwards in your strategic activities.’
She highlighted the importance of data as a key ingredient in the measurement process: ‘Very often the challenge is availability of datasets. This is typically exacerbated by system complications, key person dependencies and lack of innovative analytics in maximising tracking the incremental changes, not only for compliance and assessment but for commitment and effecting change. When you manage complexity, you need to be very clear about key matrices you are going to track that indicate the incremental shift that is occurring in the business as a result of the strategic activities being implemented. That’s the only way you’ll be able to tell a good story to investors and stakeholders.’
She concluded: ‘It’s a futile exercise if one cannot join the dots between formulation, execution and measurement of changes brought about by the strategy deployed − for me, measurement for change and impact is key.’
On strategic buy-in
Rachel elaborated: ‘To get that “inward, outward” view you need to collect different views from people within and outside the organisation. It is important to get those views, particularly in the middle-management layer during formulation of the strategy so that when the strategy is finalised and being communicated, it is not foreign: people
have a sense of being part of the formulation.’ On buy-in, she added: ‘The layer in the organisation that has the most influence in reaching a broad base of employees and effecting change is critical in the buy-in process. They will ensure that the strategy lives and breathes throughout the organisation and that there is alignment in the activities undertaken on a day to day basis. They should engrain the vision and the thinking to be able to cascade it down.’
‘From the onset, it’s important how you induct people into the organisation; you must share the vision from the beginning. I am a firm believer in inducting people properly into an organisation and clearly outlining the strategy of the business, in a clear and digestible manner. It is a big part of creating clarity on how they will contribute their talents in the furtherance of the strategy. This reminded her of an example referencing Disneyland from a Duke Corporate Education middle management course she had attended earlier in her career. The Disneyland case study highlighted client experience as a core responsibility of each employee, whether a ride instructor, theme park guide, etc. This meant that when visitors asked for directions to certain rides or attractions within the park, any of the employees should be in a position to assist and thus contributing to a positive client experience. ‘When relaying that to our business, client centricity should resonate with not only client facing employees but those that perform important back-office and support functions. Everyone has a part to play.’
Corporate culture and strategy
Rachel touched on the influence the culture of an organisation has on strategy and strategy execution. ‘A big component of strategy and strategy execution is the culture of the organisation. In the organisations I have worked for, what I found to be the differentiator is the culture and the spirit of an organisation. For instance, one organisation was very entrepreneurial – ideas were generated, risks understood and they went for it. The other organisation had big goals, but so much effort was required in turning the wheel internally in terms of people, enablement and the value delivery chain. Then there was that organisation that was a trend-setter, always in front in terms of innovation and leading the charge. Culture drives the effectiveness of the strategy.’
Rachel continued by stating the importance of a collaborative culture. ‘In businesses that seek to be integrated and client-centric you cannot have different agendas. Collaboration is that ability to be in sync in what we do, how we do it and when we do it. It is the ability to understand where you have to make trade-offs by looking at the holistic picture and ensuring at the end of the day we are winning together.’
On strategy and sustainability
‘Deliberate leadership plays a key part in ensuring that not just the bottom line is considered but social and environmental aspects as well. We have to incorporate this thinking in strategy and let business commit, otherwise it is not going to happen. You need a leadership that is conscious about their position as a corporate citizen with soul.’
She added: ‘The conversations that I am having with my team is that we need to look at, as an example, our budget cycle as a means to create a three-dimensional view of the business. We are not just putting presentations together; we need to look at how all these pieces are coming together for impact.’
Strategy in the time of crisis: the impact
of scenario analysis
The conversation inevitably veers to strategy in the time of crisis, and with that the impact of scenario planning. ‘As a business this is one activity we perform each year because we are regulated. We are required to consider different scenarios and how they will impact on the sustainability of our business. What is great about scenario planning one is able to assemble different people within the business that understand the business thoroughly and work through the scenarios together. Through that process, one looks at how the business will shift and flex should any of the scenarios materialise, both quantitatively and qualitatively. It is not always an easy exercise because it involves various factors to be considered, but at least one has a sense of the management actions that can be deployed and the impacts thereof. There is clarity in what the business has to prioritise to keep the organisation sustainable for all stakeholders.’
Parting thoughts
Throughout the interview, it was clear that Rachel is passionate about advising young CAs. ‘When you talk to young CAs straight out of articles, they all say they want to be in strategy. They don’t realise that even in that financial manager role − which is typically your first role after articles, if you choose to be in finance − strategy is already part of your delivery. You have to take each step of your career as a building block. You have to see each opportunity as a gateway to be part of strategy. At different stages of your career you will be at a different touchpoint of strategy: be it execution, tracking and measurement, or even the formulation of strategy.’
Author
Christiaan Vorster CA (SA), SAICA Regional Executive
