Understanding our strategic trade-offs
We recognise that in the process of improving access to quality healthcare, value is created, preserved or eroded across the six capitals. Deciding which trade-offs to pursue and which to avoid requires robust strategic decision-making processes, especially when these decisions may negatively impact certain stakeholder groups while enabling sustained value creation for others.
The alignment of our core purpose with national and global goals positions us well within a changing South African healthcare context. To successfully achieve our purpose, however, requires a long-term perspective – acknowledging that short-term costs across all six capitals may be incurred in the pursuit of long-term value. This central trade-off plays out in all the decisions listed below.
Responding with purpose in the fight against COVID-19
Related material matters
- Access to healthcare and medicine
- Business continuity and business model adaptation
Link to strategic levers
Analysing the trade-off
Lives lost. Rising unemployment. Social unrest. The pandemic has hit our country hard. There was never any doubt that as a purposeled business, AfroCentric would use the full weight of our diversified healthcare business to respond to the current crisis. This response has gone above and beyond what is required of us contractually to meet the needs of our clients’ members. There have been shortterm financial costs (financial capital), as well as additional pressure on our people (human capital) resulting from this above-andbeyond approach. However, taking a long-term view, we recognise that the sustainability of our business relies on the stability of our operating environment. Responding swiftly – utilising our own resources to fight the pandemic – was therefore a strategic imperative. While our chosen response resonates with our purpose and mission, we also believe that our role in supporting government’s efforts has further demonstrated our ability to act as a strategic partner within an NHI context (social capital). Moreover, significant lessons have been learnt in the process, which we believe will assist in establishing innovative models of public-private collaboration in the future (intellectual capital).
Financial and human capital invested in our COVID-19 response.
|
↔ | Intellectual and social and relationship capital gained through the process.
|
Pursuing operational excellence
Related material matters
- Employee acquisition, talent management and retention
- Business continuity and business model adaptation
- Member satisfaction for clients
- Legal, regulatory and compliance management
Link to strategic levers
Analysing the trade-off
Our purpose is to enhance the quality of life of our stakeholders. We tangibly achieve this purpose by transforming healthcare – making it more affordable and widely accessible. In this regard, aligning medical scheme inflation with consumer price index inflation remains a challenge. Most of our strategic objectives serve the purpose of reducing healthcare costs. Achieving the operational excellence required to reduce costs, however, at times necessitates human capital trade-offs. In line with our overarching objective of transforming healthcare, we therefore took the decision to outsource certain elements of our IT requirements to improve operational excellence (reducing financial capital investment requirements) while strengthening our IT capacity (manufactured and intellectual capital) to strategically position the Group within a changing healthcare environment. Pleasingly, however, through discussion with our service providers, many of our retrenched employees were re-employed within these companies.
Retrenchment of employees (human capital) as a result of outsourcing of services.
|
↔ | Intellectual and manufactured capital of specialist organisations delivering services at reduced costs (financial capital) to the business.
|
Investing in a future-fit workforce
Related material matters
- Employee acquisition, talent management and retention
- Business continuity and business model adaptation
- Legal, regulatory and compliance management
Link to strategic levers
Analysing the trade-off
As digitisation and automation continue to impact the way we work, we recognise that this also accelerates the rate at which historical jobs become obsolete. This process of change needs to be managed strategically, as rising unemployment in our country places unsustainable pressure on the stability of the operating environment. We therefore invest in upskilling and reskilling our people in line with our changing business needs and investing in change management initiatives to support this process. Furthermore, we invest in job-creating initiatives through our enterprise and supplier development initiatives.
Financial capital invested in upskilling and reskilling our employees.
|
↔ | Human and social and relationship capital increased through initiatives that upskill and reskill employees and those that serve to stimulate wider employment.
|
