Geneva, 27 September 2023 - Today, the World Business Council for Sustainable Development (WBCSD) and AICPA® & CIMA®, together as the Association of International Certified Professional Accountants, launch a new Integrated Performance Management (IPM) framework. The Framework provides a roadmap for implementing a performance management system that aligns with the organization’s purpose and value, embraces multi-capital, multi-stakeholder, long-term value creation principles and places the workforce at the center of business success.
Designed for senior business executives involved in strategy, finance and sustainability, the IPM Framework inspires leaders to think differently about performance management so that strategy, performance and incentives are actively and purposefully blended within a new culture of performance and aspiration. Indeed, the rationale for this Framework is that 70-80% of organizations fail to successfully execute their strategies and that only a small percentage (5%) of employees understand the organizations strategy.
This work builds on the Reimagining Performance Management paper, published in 2021, which found that performance management is challenged in businesses across the world because there is a disconnect between strategy, performance, incentives and people. Further extensive research was conducted for the development of the Framework, which included a WBCSD member Steering Group, 25 executive interviews, and seven roundtable discussions involving over 50 participants. The research also focused on the challenges of integrating ESG into decision-making in the Food retail sector.
“Being involved in the IPM Steering group provided a great platform to openly share experience, test concepts and ideas with peers and jointly work towards practical guidance on how to develop a performance culture that genuinely engages the workforce and allows strategy implementation to actually happen. I am confident that many other organizations will benefit from the IPM framework” said Sabine Hoefnagel, Global Leader Sustainability and Risk at ERM.
“As much as 90% of a company’s value is now made up of intangible assets, these are the thoughts, experiences and expertise of people in the workforce. It was staggering to us to discover that even in successful companies, many leaders are struggling to make the connection between individuals and the strategic objectives of the organizations.” said Andy Beanland, Consultant, Redefining Value, WBCSD. “Through the IPM Framework, we’ve taken the learnings from our extensive research into leading practice and these distilled down into actions that can be implemented by any organization, irrespective of size, sector or geography. ”
Anna Segura, Head of Sustainability Solutions at Givaudan International said: "As a business with sustainability at its heart, we rely on the engagement and commitment of our colleagues across the globe in achieving our bold ambitions. Performance management systems that align with an organization's purpose and values are an important way of encouraging and rewarding such inputs. Our own Performance Share Plan for example rewards executives and top selected management who significantly influence the long-term results of our business and our purpose ambitions. We are proud to have contributed to the IPM framework which will help more organizations embrace multi-capital, multi-stakeholder, long-term value creation principles”.
Peter Spence, Associate Director, AICPA & CIMA commented: “building on tried and trusted management accounting practice, the IPM framework introduces new methods to engage the latent potential of workforces with business strategies that increasingly integrate sustainability ambitions.”
Isil Acikgoz Erdal, Global Head of Non-Financial Disclosure Assurance, Philip Morris International said “It has been a pleasure to engage with a diverse group of professionals. This collective effort shows the strength of cross-industry collaboration. Moreover, the IPM framework may serve as a reference point for our organization as we further embed environmental, social, and governance risks into our ERM framework, thereby integrating them into our strategic decision-making efforts.”
The IPM framework is supported by an IPM maturity model, which provides guidance on the steps that companies can take to transition from traditional performance to an integrated performance management approach.
This project is made possible through funding from the Gordon and Betty Moore Foundation.
Access the IPM Framework and Business Brief here!