our four strategic choices

An important role of the Capricorn Group board is to consider, evaluate and agree on our strategy, given the evolving operating contexts in Namibia, Botswana and Zambia. The board considers our purpose, our long-term vision and our progress in implementing our strategy. Based on the board’s assessment of the material risks and opportunities the group anticipates, the directors confirm or adjust our strategic choices, as these direct the executive team’s decisions about resource allocation and trade-offs.

At the annual AsOne2020 strategic review session, the executive team made presentations and engaged with the board on the following:

  • the group’s 2018–2020 strategic cycle, including our four strategic choices and our aspiration to win through operational excellence
  • feedback from the managing directors of operating subsidiaries on their business environments, successes, challenges and strategy
  • practical insight into strategy execution across the main platforms and impact with the implementation of the Agile and Six Sigma methodologies
  • specific strategic actions relating to the turnaround of Cavmont Bank, including a change in our group oversight model, moving from strategic guidance to strategic control
  • an increased focus during the final year of the current strategic cycle on the human and culture side of operational excellence implementation
  • material matters impacting on our ability to create value in the short, medium and long term.

As mentioned in the chairman’s statement, our three-year strategy cycle is in its last year. The preparation for a new cycle will include refinements and learnings from the current cycle, and no significant shifts are expected.

Our four strategic choices

Progress summary

Focus on building our foundation in Namibia, Zambia and Botswana in order to get to a position of market leadership. We received good feedback from customers on service quality and increased our market share on assets. There are still gaps to close in our share of the deposits market.
Win in Namibia, Zambia and Botswana through operational excellence (lean, efficient, fast) and effective execution. We are gaining traction in operational excellence through the cumulative effect of Agile delivery platforms, customer efficiency, culture development and Six Sigma deployment.
Compete in Namibia, Botswana and Zambia through strategic relationships and partnerships in insurtech, fintech, mobile and telco, and education. Our recent acquisitions improved our competitive position. Further alliances are being explored.
In considering other African countries beyond 2020, target technological/borderless/cyber opportunities above bricks and mortar entry. Evaluate opportunities, whether cyber or bricks and mortar, on a case-by-case basis. The acquisitions already completed and those currently being explored will position us to expand into other African countries beyond 2020.

Operational excellence traction and challenges included the following:

  • Customer satisfaction, net promoter and ease-of-doing-business indicators were all trending upwards.
  • Transactional account processing time continued to improve.
  • At Bank Windhoek, digital channel adoption for EasyWallet and the mobile app continues to show promising growth rates. The uptake of internet banking has tapered off as the channel is maturing and being disrupted by the mobile app.
  • Customer growth rates and market share for liabilities remained challenging.
  • Deliberate employee engagement actions will continue to sow the seeds of the culture required for the effectiveness of operational excellence.

Strategy implementation and support

We believe that by successfully implementing the AsOne2020 strategy, we can build a sustainable business that makes a difference to broader society. Successful implementation relies on employees that understand the strategic choices, are clear about their role and contribution, and are incentivised to deliver on targets. We therefore have to ensure that our internal communication, rewards and recognition, employee value proposition, training initiatives and performance management are all aligned and support implementation. Our Connector Programme is at the heart of these elements.

Progress with the implementation of the four strategic choices is measured through board-approved indicators and targets. We aim to become operationally excellent and design business processes that lead to better customer experiences. Delivery against operational targets is reported to the board every quarter and includes growth in market share, customer performance metrics and business process improvements per bank.

The performance development process ensures that the group’s organisational and employees’ individual goals and objectives are aligned. We identify, evaluate and enhance the performance of employees through rewards and recognition, regular feedback and career guidance. The fundamental goal is to establish a culture in which employees and teams take responsibility for the continuous improvement of business processes and their skills and contribution.

Read more in the remuneration report.

Salient features of our performance management approach

The performance of employees against objectives (what) and against The Capricorn Way behaviours (how) are measured according to the 5Cs:

The implementation of the new performance management approach was supported by education and awareness sessions to familiarise all employees with the new descriptors and methodology. A prototype was sent out with examples, objectives, actions and measurable indicators. This helped business units to create new contracts based on a common understanding of the intent, content and outcomes of the 5Cs. This process was also automated during the year to enhance operational excellence and integrity.

Core elements of our human capital value proposition

The human capital strategy is visualised using the analogy of a flywheel: when we deliver any part of the flywheel, it accelerates the entire loop. This captures the dynamic of implementing our strategy through consistent small results phased over time and aligned in the same direction.

The Capricorn Way and the Connector Programme

The Connector Programme was created with a twofold purpose:

  • To embed the work done by the AsOne2020 strategy through The Capricorn Way, the brand values, brand proposition, purpose, customer propositions and frameworks.
  • To provide a platform for the ongoing communication, engagement, interaction and embedding of the group’s AsOne2020 strategic choices for the period 2018–2020.

The second Connector conference was held in March 2019. This year, 135 Connectors from four countries participated. The purpose of the conference was to encourage networking, expose Connectors to multiple perspectives and create awareness around the AsOne2020 strategy, risk and culture. Most importantly, it ignited the team spirit of Connectors across all entities through the “I am…” campaign. Specific “I am…” Connector activities were designed for the conference.

Elements that surfaced during the Connector activities were the commitment to embrace the thoughts and ideas of the Capricorn Group, the powerful impact of teamwork and the undeniable concept of strength through diversity.

Development initiatives and focus areas

Further initiatives to entrench The Capricorn Way, ensure effective strategy implementation and achieve operational excellence included the following:

We completed a leadership assessment for middle management. Individual plans for each assessed middle manager were developed, and a coach was assigned to each manager. A new management development programme for middle management, in partnership with the University of Stellenbosch Business School, was launched across all countries.

In the latest employee engagement survey, the Capricorn Group obtained a response rate of 87%, which is considered to be a very good response rate compared to the norm of 72%. Thirty-one per cent of employees are fully engaged, meaning they are highly committed employees and are prepared to do more than what is required.

From the survey, key focus areas were identified to drive increased engagement:

  • Talent fit, including matching employees to roles or job assignments that enable them to use their strengths
  • Employee voice, including encouraging a feedback culture where feedback is regarded as developmental and reinforces a culture of continuous conversations
  • Leadership, including encouraging and developing inspirational leadership where leaders demonstrate The Capricorn Way

Based on these focus areas, action plans will be developed by each business unit.

Engaging with our stakeholders

Our stakeholders are those individuals or groups that are impacted by our business activities – and who have an interest in our success. Their relationships with the Capricorn Group – whether they form part of the group (for example employees) or have external roles (for example clients or service providers) – determine the intensity, nature and intervals of engagement. Effective engagement with stakeholders is a core element of our vision and purpose.

Our major stakeholder engagement events for the past year were guided by the 2018/2019 strategic stakeholder engagement plan that was developed, approved and shared with group entities to align with their operational engagement plans. The group plan supports the implementation of the AsOne2020 strategy. Initiatives are clearly linked to material matters or CSR themes. For each stakeholder group, we identify opportunities and desired outcomes, such as creating strong relationships around and awareness of our regional footprint and banking brand in all three territories.

Extensive stakeholder input was obtained during five months of brand research on the Capricorn Group and its subsidiary banks as part of our monolithic brand architecture journey.

Stakeholder engagement remains important because it:

  • enables us to sense the needs of stakeholders and to respond appropriately
  • ensures engagement with stakeholders in a customised, coherent and consistent way across the group
  • enables better planned and more informed policies, programmes, products and services that are aligned with stakeholder expectations
  • supports the group’s other strategic initiatives
  • positions stakeholder engagement as an enabler of the group’s business success
  • facilitates effective internal collaboration and knowledge sharing about stakeholder interests, needs and positioning
  • communicates the importance that the group places on engaging with its stakeholders

Our list of stakeholders is set out in The Capricorn way and vision, and we provide more detail on specific interactions and engagements this year in the Group CEO’s report and the board sustainability and ethics committee report.