Agile Dynamics supports energy player with spin-off strategic planning
When a large energy company in the Middle East decided to spin off its non-core business into a new subsidiary, NewCo’s management team turned to Agile Dynamics for strategic planning support.
“Our client is one of the largest power producers in the Middle East region,” says Paul Lalovich, partner at Agile Dynamics, who is quick to add that the consultancy has a policy of not release customer names. “But it’s one of the most well-known providers in the business.”
When the client first approached Agile Dynamics, its management team had decided to divest “one of its non-core subsidiaries” in an effort to provide a more agile and opportunistic platform for further diversification and growth. .
Faced with the prospect of a complex carve-out process and doing business independently, the management team of the new company sought advice. “For a spin-off to be truly successful, ParentCo and SpinCo (and their investors) need to end up somewhere better than where they started,” says Lalovich.
This is where strategic planning comes in. “With a strategic plan in place that is not only well designed but also supported by all key stakeholders, both entities can achieve the desired win-win outcomes.” The sheer number of risks and pitfalls leaders can face, including financial, onboarding, and reputational hurdles, cast a shadow over this process.
Led by Agile Dynamics, NewCo’s management began by defining its strategic execution plan. “We interviewed leaders and a select group of senior executives to find common ground on strategy, but also on strengths, weaknesses, opportunities and threats. This served as a point on the horizon for planning purposes,” says Lalovich.
Next, the consultants performed a comprehensive analysis of SpinCo’s operating environment, which provided information on, among other things, the roadmap, integration plan and risk management approach. With the foundations in place, we then “guided the leadership team through the rigorous planning process itself, prioritizing key milestones and activities.”
Replicating a proven strategy from the world of banking (or war games), the new strategy and plans were then tested on its main building blocks, from strategic and financial scenario analysis to organizational requirements (talents, processes, systems, etc).
After giving the green light to the plan (with ParentCo), all discussions were implemented. The spin-off was made “after a quick and smooth transition,” Lalovich recalls.