The need to measure and manage the human dimension has never been greater if companies are to achieve sustainable success. That was the clear imperative acknowledged by CEOs in the report that marked the launch of the CGMA, Rebooting business: Valuing the human dimension. In addition to surveying 280 CEOs from 21 countries, we interviewed an additional 17 business leaders who are responsible for more than 2.1 million jobs and market capitalisation of $1 trillion.
Those conversations have led us to start a new monthly feature for CGMAs — “One-to-One”. Through this column, the world’s leading CEOs, chairmen and other influential business leaders share tips, insights or thoughts on a one-to-one basis. This month I met the chief executive of one of the world’s largest and most admired organisations. His top tips:
Recruiting and retaining talent in the emerging markets is key. Talent is clearly critical to the success of any business, and where there is a shortage, there is also high turnover. Turning over the entire staff of your company in these markets every five years or less has both a direct cost, but much more importantly, impacts the ability to innovate and progress.
The AICPA and CIMA also recognise that it is crucial for organisations to fully understand and measure the value of their human capital so that they can harness its power effectively. In response to this, the organisations, through the CGMA joint venture, are developing two tools to help companies measure the cost of losing and replacing talent (COLT and CORT).
Speed of innovation is critical, and you must continually transform your company. Without innovation products become generic with the consequent impact on margin. Research and development is critical to the sustainability of an organisation. How it is structured is critical: It needs to provide an environment stimulating a passion for winning through continuous improvement and striving for excellence. Continual transformation is vital to competing in our fast-changing world. Business needs to work differently with its suppliers and partners. More and more the supply chain is becoming more diffuse and often virtual. Look at the rise of Google, Facebook and Twitter.
This insight reinforces the idea that no organisation’s business model can afford to stand still. CIMA is working closely with the International Integrated Reporting Council (IIRC) to explore how companies can identify and implement resilient business models. We also regularly review and update our syllabus to ensure that it meets the needs of employers, and our research and development team has recently visited over 80 global businesses to help with this process.
Finance must further progress from serving to leading. Management accountants must take ownership of changes — to be the co-pilot or financially grounded navigator to the business. They must continue to lead the progression from analysis to action.
Our upcoming CGMA reports on skills and talent will focus on new ways of working and collaboration between executives and stakeholders, on how CGMAs can help connect the dots and achieve long-term sustainable success for their organisations.
Charles Tilley is chief executive of the Chartered Institute of Management Accountants (CIMA).