A multinational financial services group wanted to define a ten-year strategy for strategic companies in its portfolio. The company also wanted to assume a more active role that contributed value to its subsidiaries by leveraging a holistic vision of the business.
Context
A multinational financial services group had grown rapidly through a series of mergers and acquisitions throughout the region, during which the holding company had largely played the role of an investor. To develop successfully over the next ten years, the group believed that it needed to strengthen its strategic leadership, find the role which added most value and agree it with its companies. This new role would ensure the consolidation of the group.
Opportunities detected
Several problems were identified that needed to be taken into account during the definition of its new role. These included the lack of clarity about the holding’s role and how it contributed value to companies in the group, low accountability among subsidiaries to the holding (their majority shareholder). In addition, a number of threats and/or external situations were identified that should also be considered, such as the transformation of the industry, market preferences which could affect the creation of sustainable value for shareholders, and new regulations which would oblige the parent company to exercise greater control over its subsidiaries.
A co-creation project was defined with simple aims to fulfill:
Agree with the companies a corporate leadership based on sustainable and balanced value creation for society and shareholders.
Generate accountability of strategic companies through targets, metrics, responsible persons and management tools.
Define guidelines and clarify interactions and decision-making processes on critical issues in line with group strategy.
Ensure the capture of synergies between group companies.
Actions undertaken
Matrix took a collaborative approach with participation from the companies and the holding senior management to define and agree the group’s strategy with the companies and ensure a role that really contributed value.
Agreed strategic guidelines: purpose, aspiration and strategic pillars for the whole group.
Defined metrics, targets, follow-up tools and governance structure with new opportunities for interaction between companies.
Defined the holding’s role in each strategic pillar, identifying its current role and evaluating the possibility of generating value with a different role.
Established processes and roles for the most critical decisions, ensuring the implementation and operationalization of the defined role.
Structure a roadmap for each strategic pillar with initiatives, responsible persons and deadlines.
Results
At the end of the project, the conglomerate had a clear strategy, together with guidelines for its implementation and tools that facilitated follow-up by the companies. In addition, there was a substantial improvement in communications between the companies, beginning with the CEOs. The holding has assumed a more active role, principally in financial management, where it identified that it could provide greater value to its companies by defining criteria for capital assignation, management models for M&As and currency risk management models, among others.
