Strategic repositioning

Have you heard the news? Alfa and ABAB are joining forces as aaff from 1 January 2025. That places the new organisation in the top ten of the largest accountancy and advisory firms in the Netherlands. The merger of Alfa and ABAB was a considered step. For Alfa it was partly the result of a strategy project carried out with advisers from Jester Strategy. Arnoud Bosch (CFO of aaff) and Michiel de Vries (partner Jester Strategy) look back on the collaboration during the strategy trajectory.

Until recently, Alfa's Executive Board always drew up its multi-year strategy itself. The horizon was usually three to four years out. In 2022 that changed, despite the fact that a new strategic plan had just been produced. Arnoud Bosch: "We could see that the world was changing rapidly. It was about more fundamental matters than before. About the impact of technology, the influence of private equity, and about sector-level change. Both the Supervisory Board and the Executive Board wanted to look further ahead than usual. We were looking for a specialist who could support us with this."

That specialist turned out to be Jester Strategy. It was important to Alfa that Jester Strategy works with a practical method, the Strategy CUBE, in which the organisation works its way step by step towards strategic choices. In Alfa's strategy trajectory, three possible directions were formulated, from which a joint choice was made. Arnoud Bosch: "Strategy is a topic that lends itself to a lot of woolliness, but with Jester Strategy's approach we could get down to work right away. We started by formulating our big challenges; on the basis of a set of analyses we then formulated strategic options. Those options were packaged into a number of directions, from which we made a choice. Very clear."

To arrive at well-considered decisions, it is important to get a good picture of what the future might look like. That is very hard in an uncertain external environment. To give Alfa a solid frame of reference for the possible strategic directions, a set of future scenarios was developed. A team went to work on mapping the big developments coming Alfa's way, ranging from the impact of AI, market consolidation and new competitive patterns to related themes. On that basis, core uncertainties were derived. Two fundamental uncertainties for Alfa lay in the question to what extent technology transforms the profession (evolution or revolution) and the question whether Alfa would face many or few new entrants in its playing field. Four scenarios explored combinations of these core uncertainties.

According to Arnoud Bosch, scenario thinking was a crucial part of the strategy process: "Thinking about the future through scenarios really brought us a lot. At this point in the process we genuinely looked 10-15 years ahead. Jester's approach and formats also meant we really talked to each other. You learn a lot about each other's views and insights that way. We genuinely developed a language to talk about the future."

Michiel de Vries was equally enthusiastic about the scenario approach: "I know from experience that scenario thinking is very powerful, but sometimes it is seen as a nice intellectual exercise without real consequences. At Alfa that was truly different. The scenarios were loaded and lived through. In the end the scenarios were a decisive factor in the choice of strategic direction for Alfa." The strategic direction Alfa chose was tied to increasing scale. Through more size, Alfa can take an important role in technological developments, and also be an attractive and inspiring employer. Crucially however, the Alfa DNA of entrepreneurship and ownership was to be preserved in the new setting too.

The merger with ABAB is a direct expression of Alfa's strategy. Completing the merger only 1.5 years after the strategy trajectory is a real achievement. According to Arnoud Bosch, that is down not only to the content of the strategy, but also to the sense of necessity and urgency built up during the trajectory. All in all, the strategy formulated with Jester Strategy was an important basis for the merger, but the strategy also has weight for the period ahead. According to Arnoud Bosch, it is much easier for the board to focus on the topics that matter strategically, and to shift from reactive to proactive.