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Building world-class businesses
for the long term:
challenges and opportunities
Ray Perry, executive director of brand,
profile and marketing, CIMA
June 2011
What is the ‘new normal’?
Current challenges:
• Modern communications
• Globalisation
• New kinds of investor
• Backlash against short-termism
‘Emerging markets will provide opportunities for
significant revenue growth as well as a source of
talent, true innovation and ground-breaking
approaches to business. Just as important,
these markets are also creating new global
challengers.’
Mark Otty, managing partner, EMEIA, Ernst & Young
New CIMA report:
Building world class businesses for the
long term –
challenge and opportunities
available at:
www.cimaglobal.com/thought-leadership/
New CIMA report:
Building world class businesses for the long term
- challenge and opportunities
Full report available at:
www.cimaglobal.com/thought-leadership/
New breeds of investor:
‘A ‘zoo’ of
owners is emerging with different
stripes, teeth, sensors, claws,
vision, will and attitudes.’
Ira Millstein, Yale University
Speakers note:
One of the major changes that has taken place over the past few decades is the changing dynamic of the shareholder community, this
has broken down the premise of common interest.
The speaker further emphasized of investment techniques and instruments , leading to a sharp focus on shareholder value and an
emphasis on short-term results.
The speaker demonstrated, the concept of a new
breed of investors which can be understood by
studying corporations like Cadbury and Kraft
The challenge ahead:
Short-term stewardship v. long-term value creation
Getting the balance right:
‘Where you get tension is often when people
haven’t thought creatively enough about the
challenge. You have to do both. It not about
saying the short term doesn’t matter.’
Thomas Lingard, director of global external affairs, Unilever
CASE STUDY: Shifting performance targets to the long term
Long-term planning horizons:
Sectors
CIMA’s long-term plan:
• By 2030 there will be five leading
accountancy institutes in the world - CIMA
aims to be one of them
• New joint venture with the American
Institute of Certified Public Accountants -
the world’s largest association for the
accounting profession - is a game changer
Defining long term goals:
Perspective
• Future vision – 10, 20, 50
or 100 years ahead
• A ‘north star’ to guide,
offer a sense of purpose
and an argument for
today’s decisions
Planning horizon
• Practical targets that look
into the future but
address changes
required in the present
The speaker provided a good example of Unilever, on dealing
with future uncertainty to translate the same into short term
action.
So how do we make money:
• Short-term actions + long-term aspirations
• Cost leadership
• Durable supply chain
• Satisfied customers
• Innovation
• Motivated staff
Business model – how do we make money?
• Cost leadership
• Supply chain
• Workforce
• Customers
• Innovation
CIMA Business Success WheelTM
The CIMA Strategic ScorecardTM
Strategic Options
Strategic Implementation Strategic Risks
Strategic Position
The speaker presented on the following
case studies to demonstrate on the
workings of building world class
sustainable businesses:
– Li & Fung
– Interface FLOR
– Tata
Li & Fung case study: durable
supply chain
InterfaceFLOR case study:InterfaceFLOR represents an interesting example of an organisation that is reinventing
ways of doing business that minimises the impact on the environment while enhancing
shareholder value
Tata: Nano ( the 1 lakh car)
Innovative, sustainable, ethical, CSR oriented
Some final thoughts…
How do you define ‘long term’?
Managing link between short/long term?
Are KPIs driving the right behaviours?
What key factors are driving your approach?
Do you have a clear cascade of objectives?
Thank you
Further details can be found at:
www.cimaglobal/thought-leadership/
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