The logical next step
The drive for sustainability has focused heavily on availability and accuracy of data. Much of this has been driven by external stakeholders like investors, customers and regulators.
Data quality is critical but we also need to think about the real goal. What are these stakeholders really looking for? It’s not just data. It’s change.
Change means creating value in a sustainable way. Change means thinking short-, medium- and long-term. Change means making decisions in a fuller, more integrated way.
IPM Defined
To really change, companies need to integrate sustainability data into their strategy and performance management. That’s why we were so exciting to see this new paper on Integrated Performance Management (IPM) published by the Association of International Certified Public Accountants (AICPA-CIMA) and the World Business Council for Sustainable Development (WBCSD).
The paper synthesizes the wisdom of participants from 90+ U.S. and global companies. It lays out a framework designed for strategy execution, finance and sustainability:
The IPM framework provides a roadmap for implementing a performance management system aligned with the organisation’s purpose and values. The Framework embraces multicapital, multi-stakeholder, long-term value-creation principles and places the workforce at its centre. (p 8)
We highly recommend the full paper which includes four fundamental components:
- Rethinking strategic leadership
- Instituting IPM processes including mapping, connectivity and impact
- Creating a performance culture
- Enhancing resource management
It provides a framework, a roadmap and a maturity model. It’s a fresh, modern and practical approach to embedding sustainability thinking throughout your company. Bottom line, it’s about a fundamental shift from siloed functional management as it’s often practiced today to connected, strategic management of performance and change at the highest maturity level.
IPM Implemented
But how to deliver on the promise of IPM? Many of the ideas in the framework require new approaches to management and will be very hard to implement using existing financial management tools. Insights7 has just published a new brief that zeros in on five apps that companies will need to fully realize the core goals of IPM:
- Multi-capital modeling
- Value chain mapping
- Value chain costing
- Empowered teams
- Improvement initiative dashboard
Each of these supports a key element in the IPM model. They are fundamental to taking a new approach to performance management. Together, they provide the structure to see and manage the connections between operational teams, their target improvement initiatives and the value they create for for shareholders and stakeholders. Real change comes when we change how key decisions are made about resource allocation and initiative funding.
IPM Success
Check out the examples we share in our brief about how to deliver on the promise of IPM. We hope they help you create a more integrated performance management system. Start now to advance your company’s sustainability transformation and deliver on the promise of long-term value creation for your shareholders and stakeholders. Please let us know what you think!
