A more competitive market and better-informed, wealthier and more demanding clients require the development of more specialized projects. As a result, a property developer saw the need to restructure to ensure sustainable growth.
Context
A leading property developer with a successful growth story was facing major changes in its market, including a switch to high-rise construction and the growth of niche markets with specialized products. The changes made clear the need to revise whether the organization was the right one to face future challenges and whether it facilitated the entry into new market segments.
Opportunities detected
Matrix undertook an in-depth analysis of the company’s organization covering its structure, governance system and processes and those elements which facilitated or hindered flexibility and specialization in products required the future. Opportunities for improvement were detected in the organizational system, particularly through increased centralization, greater organizational agility and flexibility throughout its business divisions.
Proposed actions
To implement a long-term vision of the organization, a three-stage process was proposed, beginning with changes that would cause minimum disruption. During the first stages, three lines of action were proposed: a) Centralize the architectural offices, b) centralize purchasing, strengthening a strategic vision and leading to large-scale contracts with more added value and c) specialize in the area of commercial operations, freeing up back-office time and developing a single counterpart for financial institutions, increasing the company’s negotiating strength.
In addition, the main risks associated with the specialization of each one of the selected roles were identified, designing mitigators to ensure a correct implementation. Adjustments were made to the governance system, to ensure a correct coordination between subsidiaries and centralized specialist areas; an incentives system was designed to align and ensure working standards throughout the organization and a change management plan was drawn up, including a communications plan and training and coaching to facilitate the process.
Impact
The new organizational structure captured annual benefits worth 12% of profits, principally through adjustments to staffing levels, greater negotiating strength in major acquisitions, and a reduction in the number of days required for loan recovery.
