Agile Dynamics supports energy player with spin-off strategic planning

31 January 2022 2 min. read

When a large energy company in the Middle East decided to spin-off its non-core activities into a new subsidiary, the NewCo’s management team turned to Agile Dynamics for strategic planning support.

“Our client is one of the largest producers of electricity in the Middle East region,” says Paul Lalovich, a partner at Agile Dynamics, quick to add that the consultancy has as its policy that it does not disclose client names. “But it’s one of the most well-known providers in the domain.”

When the client first approached Agile Dynamics, its management team had decided to divest “one of its non-core subsidiaries” with the aim of providing a more agile and opportunistic platform for further diversification and growth.

How Agile Dynamics supported an energy player with spin-off strategic planning

Facing the prospect of a complex carve-out process and doing business independently, the leadership team of the new company sought guidance. “For a spin-off to truly succeed, both ParentCo and SpinCo (and their investors) should end up in a place better than the one where they started,” explains 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 spin-off.” Casting a shadow on this process are the large number of risks and pitfalls that leaders can run into, including financial, integration and reputational roadblocks.

Led by Agile Dynamics, the NewCo’s leadership started with defining their strategy execution plan. “We interviewed executives and a select group of senior managers to find common ground on the strategy, but also strengths, weaknesses, opportunities and threats. This served as the dot on the horizon for planning purposes,” explains Lalovich.

Then, the consultants conducted a comprehensive scan of the SpinCo operating environment, which provided insights for among others the roadmap, integration plan and risk management approach. With the fundament in place, we then “guided the executive team through the rigorous planning process itself, prioritising milestones and key activities.”

Replicating a proven strategy from the world of banking (or war gaming), the new strategy and plans were then tested across its key building blocks, from strategic and financial scenario analysis to requirements for the organisations (talent, processes, systems, etc). 

Having green lighted the plan (together with ParentCo), all the talk was put into action. The spin-off was completed “following a quick and seamless transition”, reflects Lalovich.