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 Anine Pheiffer, GM Strategy at Astron Energy and SAICA Southern Region Council President.
When Anine moved from KPMG literally across the road to Chevron South Africa in 2007, she never thought that she would eventually become the General Manager: Strategy for Astron Energy 14 years later. Astron Energy, a Glencore Group company, is one of the leading suppliers of petroleum products in South Africa through its vast network of more than 800 Caltex-branded service stations.
‘I’ve been in the industry for 14 years and had various roles across different business units and departments across the value chain. Then, in 2019, after a change in majority shareholding, the company became Astron Energy, migrating from being integrated into a global oil major to a company that operated on a much more independent basis. This created the need for a strategy business unit,’ said Anine.
In the last two years she has gained invaluable experience: ‘I have had the opportunity to work with our executive team to develop everything from the company’s vision, mission and purpose to our core values. We asked the fundamental questions to get there: “Yes, we’ve operated as an industry leader in South Africa since the early 1900s, but who are we now and who do we want to be in the future; what do we stand for and what does that mean for us in terms of integrity and purpose?” It has been a phenomenal journey for me so far.’
During the interview she shared some valuable insights gained through this practical experience:
Strategy is critical for providing direction and ensuring alignment
‘It is critical to have a strategy that everybody buys into, which creates an environment for everyone to execute against it.’ She quotes a saying she heard years ago, “A man without a purpose is like a ship without a rudder.” A rudder gives the ship direction. A ship can weather stormy seas, hectic headwinds, and sail through calm days. A business can also experience drastic change; we all had massive headwinds and stormy weather with COVID-19. Your strategy gives you the ability to navigate those waters; it helps to give a company direction and then everyone can get behind it and do their bit.’
The level of direction and detail needed will depend on how big or complex your business model is. ‘If you look at us as an example: we are a manufacturer, a wholesaler, as well as a retailer; we have all these different business models in our value chain. Your strategy will ensure that there is alignment in terms of your core vision and purpose within each individual business unit, so that the business unit’s output aligns with where you ultimately want to go and the direction you are setting.’
Choose a strategic model that fits your organisation’s stage of strategic evolution
Anine mentioned that there are a number of different strategic models and the one you opt for must fit your organisation. ‘You need to choose a model that works for not only for your industry but also for where your company is in its strategic evolution. You probably have a different strategic evolution to that of your competitors, so you need to choose the tools that work well for your company at that point in time.’
As an example, she referenced Astron Energy’s own strategic evolution. ‘We are a company with a long history. We started in 1911 by importing crude oil, then in 1936 we established our retail service stations and later adjacent products such as lubricants through our blending plant in 1955. In 1966 we built our refinery, leading to backward integration. Later we entered into an alliance with FreshStop in terms of convenience retailing in 2009. In 2019, after the change in majority shareholding, we deployed our Astron Energy vision, mission and purpose to staff and all our stakeholders. We’ve spent quite a bit of time since then embedding those within the organisation,’ she explained.
‘Then in 2020, as an executive team, we delved deeper in terms of our strategic navigation and started plotting actions across different time horizons. We looked at what we need to do today, obviously taking the COVID situation into consideration. We had to plan for our recovery in the short to medium term while preparing for our long-term future. It is a model that I like because we can have different strategies in play at the same time. We operate in such a dynamic environment in our industry; it is not just what is happening in the country that is important, it could also be a geo-political matter offshore that has a direct impact on our business. So, from my point of view, looking at strategic navigation through different time horizons simultaneously makes sense.’
Create a strong ecosystem of people working on your strategy
Anine emphasised the importance of the having the right people with the right capabilities working on strategy, which could include external specialists who complement internal capabilities and institutional knowledge.
‘Building an ecosystem of trusted partners that can help you to get to where you want is important. For example, when you interrogate opportunities for innovation, you need the knowledge internally or a partner with expertise in that space.’
For the different time horizons Anine mentioned earlier, Astron Energy partnered with a company that specialises in scenario planning.
The importance of incorporating sustainability principles
‘Besides my strong personal views on the matter, sustainability can’t just be a nice add-on that you talk about; it has to be part of your strategy because that sets the direction against which people will execute.’
‘For us, sustainability is really our social license to operate. If you think of our service stations, we are operating where people live and work, so it is important that we respect those communities by being a good neighbour. From the onset, we built sustainability into our corporate purpose: “Fuelling energy needs through responsible value creation”. This way, it filters through to the vision and mission and becomes one of the core values of the company.’
Elements relating to buy-in and implementation
‘I want to emphasise that, for seamless integration, there has to be an overarching alignment between your corporate strategy, your individual business unit strategies, your customer value proposition and your employee value proposition. Your strategy must touch on all these different elements of the business.’
Anine highlighted that one of the key criteria for buy-in and implementation is clarity: ‘It is very important that people understand their role within the company and how it contributes to the overarching strategy. Whether you are in the credit department approving a customer’s credit limit or you are responsible for health, environment and safety on the forecourt, you need to know how you are contributing towards the company’s purpose. When people understand that their work has value and that their contribution adds to the bigger picture, there is complete alignment.’
A second element speaks to communication. Here, Astron Energy leverages its internal communication platforms, creating monthly themes and recognition for employees living their strategy, values and behaviours. They also have business unit ‘town hall sessions’ where they can make the strategy more visible and practical.
Finally, it also cascades into their performance appraisal system, from setting organisational to personal KPIs. ‘That old saying of “what gets measured gets done” also comes into play. You can cascade strategy throughout the organisation through communication channels and you can also cascade strategy through the KPIs that business units and individuals get measured on.’
Thoughts on having a strategic mindset
‘It is important to continuously evolve and focus on your own professional development. Throughout my career, I have been able to develop new skills and improve my capabilities through different ways of working. This includes learning from others, so I have always tried to surround myself with the right people in my ecosystem as well as trusted advisors that can challenge my point of view. Just as we expect a business to evolve, it is important for professionals to evolve and stay relevant.’
Anine further accentuates the importance of continuously gaining new information and knowledge. She referred to the thought leadership pieces available from leading consultancies that give different points of view on strategy, as well as on the industry you might find yourself in.
‘Even our CA training prepared us to learn quickly, to assimilate information rapidly and identify risks proactively. That is basically what strategy is − looking at what you have today, determining how you can sustainably grow a business into the future, what you need for tomorrow and what shifts are required in order to get there.’
AUTHOR | Christiaan Vorster CA(SA), SAICA Regional Executive