Page 55 - Capricorn IAR 2020

2020 INTEGRATED ANNUAL REPORT
Our new AsOne2023 strategy:
It’s All About You
Capricorn Group’s new strategy is anchored in the Group’s purpose:
Improving lives through leadership in financial services by being Connectors of Positive Change.
This means that we want to show sustainable growth, that we want to win, gain market share, improve the customer experience and obtain market leadership.
Our strategy aims to build sustainable competitive advantage in the countries we choose to compete in. We evaluate the sustainability of our strategic purpose by our ability to win: measured among others through market leadership, which can be growth in a specific segment, or by growing market share at a faster rate than competitors.
We have identified specific strategic choices to anchor our strategy. Strategic risk is mitigated through our risk management process. Our strategic choices will guide the board and management to develop sustainable competitive advantage and to continue creating value for all stakeholders. To test the robustness of our choices, we mapped these against the material matters – showing no gaps or inconsistencies.
Our strategy development process
We started the new strategy development process with the launch of the Red Vellie movement at the leadership conference in September 2019. Group CEO Thinus Prinsloo and chief strategy officer Louis Carstens were the owners of the nine-month plan towards Group board approval of the strategy in June 2020. The plan involved different sessions involving the Group executive team, the Group leadership team (entity executive management teams and the NeXtGen board) followed by a Group board strategy session in March 2020 – all involving a broad range of employees, specialists, executives and Group board members. Each entity developed its own strategy in support of the Group strategy, with specific and relevant objectives, key performance indicators (metrics) and strategy performance targets.
For the 2021 – 2023 strategy cycle we built on learnings from our previous two cycles:
• From 2014 – 2017 our focus was on building strategic capabilities and emphasising a cohesive approach. ROE was used as our main indicator of success.
• From 2018 – 2020 we focused on operational excellence while positioning the Group as Connectors of Positive Change. We identified four strategic choices as strategic anchors and to guide us in our strategy execution.
The Group CEO reflects on our achievements during the last cycle in his report from page 23. A few further learnings in terms of strategy development informed our thinking for the 2021– 2023 strategy cycle:
• Strategic choices: We defined narrower and more specific choices in terms of customer experience and digitisation, but opted for more generic choices with regard to the countries we compete in.
• Our key competitive choice: We integrated operational excellence with digital and customer experience and will focus specifically on increased customer experience, revenue growth and cost reduction.
• Digitisation: Digitisation will become part of the entities’ business strategy and transformational culture.
• More focused approach to growth: We moved away from a functional approach to systematic growth capability development.
• More integrated strategy execution: Our approach encompasses all execution platforms, including customer experience, growth, digitisation, operational excellence, people, culture and brand.
• Quarterly strategy alignment and execution sessions with Capricorn Group leadership team: This will drive deeper buy-in and shared ownership of the strategy.
Measuring and monitoring progress
During previous strategy cycles we focused on data to derive quantitative evidence of impact and progress. For 2021 – 2023 we refined our strategy execution measuring and monitoring approach as follows:
• We will continue to measure progress on strategy execution by focusing on both quantitative and qualitative strategy performance metrics
• Our strategy metrics will encompass lead, current and lag indicators which encourage strategic thinking and position us to deal with uncertainty and complexity
• The entities will identify the strategy metrics and targets relevant to their unique competitive environments
• As per current practice, performance against targets will inform specific strategy execution actions by each entity
• On a quarterly basis a consolidated view about strategy execution performance will be submitted to the Group board to monitor strategy implementation, progress and challenges
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