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/