Case Study: Strategy Development

Challenge: Creating a strategy process for a complex geographically dispersed business

Organization Size: Large ($1,000,000,000 annual revenue)

Industry: Industrial construction/oil & gas maintenance

Creating a Strategy Process for a Complex Geographically Dispersed Business

Situation: A large industrial construction company headquartered in the Southwest had grown
opportunistically without regard to creating an overall business strategy. This company had major business
entities throughout the United States and had also grown through the acquisition of companies in adjacent
businesses. As a result, the company had over 15 profit-centers in various industries across the South,
Midwest, Southwest, and Western United States. Each profit-center was run relatively independently and
was given significant autonomy with regard to the work they pursued and how they undertook its
completion. The corporate entity began to see patterns that were troubling, including hoarding of resources
and more competition than collaboration between profit-centers. Profit-centers were also frequently
unwilling to work together on client acquisition, competing against each other to acquire client work,
thereby often driving down profit margins and confusing the client. Directors of profit-centers took pride in
being called mavericks, not conforming to corporate recommendations and using the annual revenues
their profit-centers generated as a rationale for their independence. The corporate executives came to realize
that profit margins were beginning to erode and that the type of culture they wanted across the company was
being threatened. In addition, the desires of the individual profit-centers were taking precedence over what
was in the best interest of the organization as a whole. Although the company focused regularly on a
revenue goal during their annual planning, they had not developed a long-term business strategy that
included how each profit-center would align with corporate objectives. In order to address this issue, the
company contracted with Myron Beard Executive Consulting (MBEC) to assist in the creation of a company
strategy.

Process: All strategy processes have the following goals in common:

The MBEC Difference

MBEC helped a large company overcome a widely dispersed geography and competing profit-center
interests to work with a collaborative, synergisticand more profitableapproach.

Clarify a desired end state

Identify the current state (data acquisition)

Understand the gap between the desired end state and the current state (data interpretation)

Make recommendations to close the gap

Secure key employee ownership of the recommendations

Implement the recommendations

 1. Clarifying of Company Objective: Sun Tzu in The Art of War said, Tactics without strategy is the noise
before the defeat. The corporate executives recognized that, without a unifying strategy in place, the
company ran the risk of either imploding as a result of not being able to effectively manage all of its
business entities, or exploding as result of the profit-center mavericks becoming more isolated from the
larger company and breaking away. The corporate executives wanted to create a clear, simple, cohesive, and
comprehensive business strategy that would drive processes and business practices throughout the
organization. This business strategy would serve the purpose of creating a uniform corporate identity by
driving consistency, reliability, control, and, ultimately, increased leveraging of company capabilities,
without adding unnecessary bureaucracy. In addition, corporate executives wanted leadership to internalize
this strategy development process so the company would not require external consultation and facilitation to
continue this process in the future.

2. Discovery of Current State Analysis: MBEC began rigorous data discovery work to understand both the
clients current status and to put together a clear picture of what gaps existed. This discovery process
consisted of intensive interviews with corporate and profit-center executives and key employees, as well as
a review of the documents and processes that the organization had been using to that point.

3. Presentation of Conclusions: As expected, the data indicated a fragmented approach to business that
included focusing on short-term wins at the expense of corporate-wide benefits; a lack of consistent
practices and processes in the execution of the work across the company; an inability of the corporate office
to effectively impact change because of the random manner in which corporate worked with profit-centers;
an erosion of both revenue and profit margins; and, finally, the increasing competition from other companies
that had already created a more uniform and sophisticated approach to the marketplace.

4. Recommendations: As a result of these conclusions, MBEC suggested that the organization undertake
the following recommendations:

a. Unification: In order for the business to become a one-company company, it was clear that
all the profit-centers needed to be on board with this new corporate initiative of strategy development.
MBEC recommended that all profit-center managing directors be assembled to review and discuss this new
unified, collaborative, systematic, standardized, consistent, and long-term strategy development. Further, it
was recommended that all profit-center managing directors both understood and agreed with this new
corporate direction.

b. Ownership: MBEC recommended that the organization identify key individuals who would be
involved in the creation of the initial strategy development. This included identification of an individual or
small group to manage the process over time.

c. Creation: MBEC worked with the new strategy team to develop a process for creating a
company-wide strategy, including tools and methods required to maintain this strategy development over
time. This work resulted in the creation of company-wide Mission, Vision, Values, and Strategies statement
to improve the key elements of sustained success in the industry. Each strategy had sub-strategies, including
annual goals and expectations in the framework of a five-year outlook. Metrics were identified to measure
whether the strategies and sub-strategies were accomplished.

d. Implementation: MBEC worked with the strategy team to take this work to each of the profit-
centers and align their work with the corporate strategy. Each profit-center revised its own mission to align
with that of the corporation. In addition, profit-centers began the process of working more collaboratively
with other profit-centers. The organization was restructured from 15 profit-centers to three areas
(geographically), in order to drive consistency and standardization throughout the organization. This simpler
structure allowed the company to implement change more quickly and with fewer obstacles than before.

Outcome: This strategy development planning became a standard annual process. It included the three area
managers working with the corporate strategy team to revise, as necessary, the rolling five-year strategy.
After some bumps in the road with expected early resistance to the process, the maverick mentality
quickly dissipated and a much more collaborative and synergistic approach developed to win client work.
Five years after the initiation of the strategy-development process, the company was purchased by a larger
company at a 250% premium!