FGV Annual Report 2013

ACCELERATING IMPROVEMENTS The ultimate challenge now lies before us – to focus all our energies on realising the aspirations of our Global Strategic Blueprint. If the Group is to be among the top 10 global players over the next seven years and grow its business eight-fold, it needs to be more aggressive and accelerate improvements. As we move into 2014, we have mapped out a clear strategy to meet the targets we want to achieve on a year- to-year basis. CEO’s priority. Under the Performance Excellence Programme we are reshaping the Group by focusing on Operational Improvement, High Performance and Portfolio Optimisation. My own priority areas will be those that have the greatest impact on the Group’s business performance, namely budgetary discipline, upstream cost management and productivity, growth through mergers and acquisitions, development of trading and country strategies and the introduction of a matrix-based organisation structure to drive efficiency and productivity. With a myriad of transformation projects simultaneously underway, scorecards will help to keep tabs on performance metrics and these will be cascaded to the respective leadership teams. The Group has also revived the Transformation Management Office (TMO), whose principal role is to drive results by tracking progress against pre-set targets and outcomes. TMO will also be working closely with business and initiative owners to solve critical issues and provide support where corrective actions are required. Operational improvements. On the operational front, we are looking into several key areas that have a significant impact on profitability. In upstream cost management, we are adopting best management practices, establishing estate-level scorecards, enhancing grading capabilities and optimising our extensive mill network. Other areas would include our trading, procurement and pricing strategies and maximising the potential of our R&D capabilities. High performance. In our on-going transformation into a high performance organisation (HPO), we strive to inculcate a culture whereby key performance indicators (KPIs) become ingrained as a way of life in the workplace. More than ever before, we need a tighter grip on budgetary discipline linked to KPIs and other leading indicators aligned to the Group’s vision and direction. At regular intervals, the Group’s performance has to be benchmarked not only against its peer sets but the best in class to achieve a distinct competitive advantage. To drive a high performance culture, a matrix-based organisation structure will also be introduced, which unlike a traditional functional hierarchy, allows employees to move beyond the dotted lines, working across functions and products structures. People drive the organisation and the Group’s ability to be a HPO depends on the knowledge, capabilities and commitment of its human capital. We want to brand FGV as an employer of choice to attract and retain the best talents the market has to offer. Besides improving the recruitment process, we are also fine-tuning the Group’s Performance Management System that will link rewards to performance. Another human resource initiative is our Talent Management Programme, the objective being to identify the top talents at mid-level and leadership tiers to ensure a talent pipeline to assume open positions. Portfolio optimisation. Greater emphasis will be placed on managing our portfolio of assets. The Group’s priority building blocks include the pursuit of growth through mergers and acquisitions. Our approach is to pursue opportunistic deals in high margin and high growth businesses. Geographical expansion remains a critical aspect of our growth strategy. Go to market country strategies are being developed so that the Group can deliver its unique value proposition to its target markets, such as Myanmar, Cambodia, Indonesia and other South East Asian nations. To get the most of our existing assets, we are identifying new markets to maximise productivity. Non-performing assets will be turned around, while certain non-core assets that are no longer a strategic fit to the Group’s evolving business model will be hived off. At the same time, we are establishing new profit centres and developing new revenue streams. CEO’s Review Ulasan Ketua Pegawai Eksekutif Felda Global Ventures Holdings Berhad 42