The Industrial Development Corporation of South Africa Limited (IDC) has taken its performance management systems to a new level, with the help of organisational performance consulting company, Analytix.
Lese Matlhape, executive vice-president: Professional Services at IDC, explains that the 63-year-old Financial Development Institution (FDI) - the longest surviving in the world - has long used performance management principles to drive its business operations.
More recently, coinciding with a period of restructuring following the appointment of new management in 1997, the IDC scrapped its older performance management systems and implemented a new system in 1999.
"We wanted to take this to yet a new level and in 2002, with the help of Analytix, we created what we believe to be the most comprehensive, well-functioning and sophisticated performance system in any FDI in the world," he says.
Analytix competed against leading companies in the field to win the IDC tender. The system is intranet-based and interfaces with the IDC`s SAP information system, which it is in the process of implementing and which will eventually create a completely automated performance management environment.
To ensure its systems followed best practice in similar institutions in the world, the IDC first conducted benchmark studies with, among others, World Bank, the Development Bank of Canada, the European Bank of Construction and Development and the Nordic Development Bank.
Yet further benchmarks were done in conjunction with Analytix. A key element to emerge from these studies - execution of which has set the IDC apart - was the need to implement performance management at three levels: at the corporate, team and individual levels.
"Analytix`s thorough understanding of performance management, coupled with a holistic approach that mirrors our own, meant that we have been able to ensure synergy and compatibility at all three levels," says Matlhape.
"We now have a highly effective system of checks and balances that ensures that objectives at all three levels are in line with both the mandate and the strategy of the IDC.
"In this way, strategy at the corporate level is cascaded downwards to the various management teams, who in turn spread it further down to individuals."
Every six months the business plans of each division are reviewed and double-checked for synergy with corporate strategy and every individual is assessed to ensure similar alignment.
A focal point of Analytix`s work at the IDC was to introduce a competency framework, with functional and behavioural competencies related to jobs and job families within the IDC. A profile was prepared and relevant competencies selected for approximately 100 job families within the IDC, each with their unique, required competencies.
Each competency profile includes varying scales of complexity, providing the IDC with a practical tool to assess individual competencies against a set benchmark for a particular job family, and to identify training needs.
Using the Balanced Scorecard as a basis, the IDC has created its own simplified version to assist it in identifying goals and measuring its success in attaining these, using predetermined scoring criteria.
"It has also provided us with invaluable, accurate input for issues such as succession planning, bonuses, our strategic award system, as well as personal development and training," says Matlhape.
The IDC has long been a sought-after employer, attracting the cream of the country`s professionals across all fields including legal experts, economists, accountants and engineers, among others.
"The IDC is a fertile training ground for specialists in these disciplines and the knowledge they acquire within the organisation represents our most important asset."
He explains that, although the IDC is a governmental institution, it is self-financing and is therefore governed by strict business principles and, as such, relies heavily on its in-house business experts.
"It is therefore of strategic importance to the IDC to retain the skills of these individuals," he points out. "Our approach to performance management not only assists us in highlighting weaknesses, but it also enables us to reward our high-flyers.
"Recognising strengths and weaknesses in this way leads to increased job satisfaction and loyalty. It also maximises our return on investment in training."
He adds that there has been excellent buy-in among staff at the IDC to the new system.
According to Matlhape, who has been involved in the performance management drive at the IDC since its inception, human resources forums and FDIs all over Europe and America have expressed keen interest in gaining knowledge from the IDC`s experience.
Johan Botha, CEO of Analytix, confirms that the IDC has established a performance management record that is the envy of many companies still battling to achieve results from their systems.
"The organisation`s long history of commitment to performance management, backed by visionary leadership, has undoubtedly positioned the IDC at the forefront of international trends and best practice in the field."
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Analytix is a South African professional services firm devoted to the measurement and improvement of organisational performance.
Specialising in performance management solutions, Analytix assists organisations to translate, implement, and manage strategy, by linking objectives, initiatives, and measures to an organisation`s strategy. Analytix facilitates the review of business processes and internal workflows that focus key employees on a common strategy to assist the organisation to become innovative and strategically focused.
Analytix supports the widely acknowledged Balanced Scorecard approach. The Balanced Scored provides a well-proven framework for measuring organisational effectiveness and performance in both profit and non-profit organisations.
IDC
The Industrial Development Corporation remains one of the most important instruments for developing South Africa`s economy to be viable, sustainable, environmentally and socially responsible.
The organisation contributes to economic growth, industrial development and economic empowerment through its financing activities. The IDC has evolved from being a leading industrial player at national and regional levels to being the first South African Development Finance Institution (DFI) to have its mandate extended to the rest of the African continent. These developments will provide an important catalyst for the New Economic Partnership for African Development (NEPAD).
The IDC has a strong track record of success, having financed many of Southern Africa`s major projects, from the creation of the Phalaborwa Mining company in 1963 to Sasol II in 1975, the Columbus Stainless Steel project and Saldanha Steel, to the Mozambique Aluminium Smelter (MOZAL) in 1998, whose capacity was doubled in 2001.
Clients are diverse, comprising mainly large projects across all industrial sectors, from manufacturing and mining, to the metals and chemical industries. More recent diversification has seen the IDC create, for example, business units focusing on key sectors such as tourism and a range of small to medium enterprises.
The IDC featured in SA`s Most Promising Companies in 2003, as well as in the Best Companies to Work For.
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