With a background in financial management and business valuations, I have always been intrigued by ‘strategy’, the thing that ultimately sets a company apart from the next and probably, together with strong leadership, the main driver behind sustained value creation. In a series of interviews, I will be exploring the different approaches of different business leaders (all chartered accountants) to strategy.
I had a virtual interview with Ajen Sita, EY Africa CEO. As Ajen shared his thoughts around strategy and avidly explained EY’s strategic process, it again became apparent to me that an organisation can have a global strategy and make it applicable, with total buy-in, on a regional level, even if the regions and countries are completely diverse.
Ajen’s ability to explain the building blocks of strategy clarified the process and made concepts easy to follow, which is the key to successful implementation.
The principles of setting strategy
To frame the multiple conversations we had, Ajen conceptualised some insights on setting strategy and highlighted some changes he observed throughout his career:
Strategy has become agile
‘The old notion where companies do a five-year strategic plan, refine it, put it in a book, tie a ribbon on it, and then move into execution mode for five years is over. Strategy has become a live process, daily, weekly, monthly.’ He added that at EY they have not done the classic breakaway strategy sessions for years now. By introducing agile ways of working as a mindset, strategy now emerges as they go along. ‘For me, strategy is an ongoing process, we bring our leadership team together regularly, at least on a monthly basis, where we keep holding the mirror up to ourselves to ask is the strategy still right? Are the priorities still aligned? Is the execution still on track? It has become a dynamic process.’
Strategy is more about direction than goal setting
‘Setting direction rather than setting strategy is fundamental today. When I think about our own business, we think about strategy as setting the direction.’ With direction, he implies some of the following questions: What kind of business are you trying to build? What kind of relationship are you trying to have with your customers? Who are your future customers going to be?
Framing your strategy with a purpose statement
‘I do think not enough companies frame their strategy with a purpose statement.’ Ajen added that many companies still frame their strategy using the language of size: ‘For example, our strategy is to be the number one firm in five years’ time; our strategy is to be the biggest company in South Africa.’ This framing does not motivate and drive people; instead, motivated and driven people drive innovation. ‘I think younger people are looking to be part of an organisation that recognises its role as part of society. As you grow you are investing in society, playing a role in society, be it around climate issues or other social welfare issues.’ He continued: ‘Companies have got to have a social conscience. I don’t think we are seeing that clearly enough.’
Corporate culture determines buy-in into the strategy, not necessarily KPIs and scorecards
‘Strategy has got to be pervasive right through the organisation, so that your newest recruit who joins your organisation knows not only what the strategy is, but what their role is within that strategy.’ To get the buy-in, it is important for an organisation to define its employer value proposition − why should someone choose to work for you and not somewhere else? ‘Every person who goes to work expects a number of things. You want to get personal fulfilment, you want to feel that you are learning, developing and growing, you want to get paid for all your good work − but you also want to feel you are making a difference, you are contributing, you are playing a part in your team and in in your organisation’s success.’
The leadership of an organisation should spend a lot of time listening and observing. ‘If you just care to listen, that can be used as a significant input to drive strategy and direction. To get people excited about the future, you must make sure they can relate to how it will make a difference to them and, in turn, how they could make a difference in terms of the strategy. If you cover those two aspects, most of your job is done.’
Making strategy practical – the EY example
Ajen took me through the current global overarching EY strategy and how it, in turn, gets disseminated and made practical on a regional and country basis.
‘Today EY’s strategy is the same anywhere in the world you go − South Africa, London, Nairobi, Kenya India, Nigeria. The unifying thing that guides us throughout the world is our purpose statement: EY’s purpose is building a better working world for our people, our clients and our community.’
That overarching purpose statement is then cascaded into four focus areas (they call it the ‘four values’) to be able to implement and measure the purpose statement:
- Financial value – their business must be able to be profitable and financially sustainable, which in turn will attract the best talent.
- Client value – to have a distinctive brand in the marketplace where their clients want to be associated with them, where they make a difference to clients and impact them positively.
- People value – to be the best employer in professional services in the world, reflective of the diversity in the world they operate in and make a difference to their people.
- Societal value – to make a difference to society, beyond the skills they have.
It is easy to see how these ‘four values’ are applicable in a global as well as a regional and country context.
The next step in their cascading principle is the ‘four pillars’ they use to execute the strategy:
- Client centricity – understanding your market, understanding your client, bringing insights into their business.
- Diverse and exceptional people – making sure their business represents the geographic diversity what you would expect of a global organisation. This speaks to creating a learning culture of constant development and growth in the organisation, to be able to make a difference in the market.
- Data and technology − this speaks not just to data and technology as used in their business, but how data and technology are used to help their clients transform their businesses: using data and technology to shape new ideas, new solutions and new insights.
- Teaming and integration − becoming part of ecosystems; teaming up and collaborating across networks to bring the best solutions and innovation to clients.
As we discussed EY’s ‘four pillars’, it became clear that ‘the cascading principle’ makes it possible for their overall purpose statement and ‘four values’ to be disseminated to a regional and country level.
The now, the next and the beyond
Ajen refers to the ‘now, the next and the beyond’ methodology. In order to make the direction as set out in their purpose statement, ‘four values’ and ‘four pillars’ practical and agile, ‘we think about strategy as setting the direction, then we break it into three time buckets which we call the now, the next and the beyond:
- The now – how do you interpret the ‘four pillars’ in response to real life that is happening at any point in time, to the organisation and to their clients.
- The next – given the context of what we know, what is the next 12–18 months going to hold, pivoting to how should we respond and how is the market going to respond?
- The beyond – analysing trends and building for the future.
- ‘In the “now, next, beyond” framework, which is the daily execution of the strategy, you get to respond to what is happening around you, your local market reality, your local dynamics.’
EY recently changed their employer value proposition to be in line with their corporate culture to ‘It is yours to build’.
‘It’s a simple statement to recognise our culture – an empowering culture that says EY is a large global organisation, with access to any industry, any solution, any business unit, any country. You can learn any skills you want to learn at a speed you want to develop at; we are like a platform for your career.’
AUTHOR | Christiaan Vorster CA(SA), SAICA Regional Executive