BrazilCaliber Consulting helps conglomerate deliver strategic transformation
When a major industrial group in Saudi Arabia sought guidance for a long-term strategic transformation, the company’s board of directors called in Caliber Consulting for support. A reflection on the project, the achievements realized and what have been the ingredients to success.
Saudi Arabia’s Eastern Province is home to numerous industrial giants, including a prominent, multi-faceted conglomerate that turned to Caliber Consulting for strategic guidance amid the rapidly evolving landscape in its industry.
The company’s objective was geared at ensuring its financial stability and at the same time transitioning a new and future-proof business and operating model. Meanwhile, the company wanted to enter its IPO preparation process in optimal shape.
“Achieving the company’s goal required a holistic approach to financial stabilization, focusing on cash conversion cycles, restructuring SBUs, strengthening internal operations, and more,” says Shadi Chehayeb, a principal consultant at Caliber Consulting.
The strategy
The project started with a strategy development phase, to ensure that the company’s goals were aligned to Vision 2030, sectoral dynamics, and internal pillars.
“Saudi Arabia’s Vision 2030 is more than an economic plan; it’s a blueprint for a sustainable future,” explains Chehayeb. “Our role at Caliber Consulting was to ensure that our client's strategy was not only aligned with this vision but also positioned to thrive in an ever-changing market.”
Working together with leaders from the company, the consultants helped co-develop a new strategy – empowered by Caliber Consulting’s research and advisory expertise.
According to Chehayeb, this way of working differentiates Caliber Consulting from its competitors, including the well-known strategy houses. “Our co-created strategy fosters greater buy-in and commitment from the management. This approach provides us with a deeper understanding of the client’s business, ensuring improved relevance and practicality. It also enhances learning, builds capabilities, and strengthens relationships and trust.”
Calibrating the organization
Getting the strategic direction right, and aligning it with management and employees, is the first step of Caliber Consulting’s comprehensive approach for transformation at its clients, the others being: Organization, Customer, People, and Culture.
“This approach helps us ensure that strategy is translated to all the key pillars that impact a change process, and that there is an integral focus on results delivery. Our framework is a proven methodology for strategy execution.”
Based on the approach, Caliber Consulting and the client introduced a number of so-called ‘pillars of success’ – areas which were defined as key for the program’s progress. For each area, specific goals and objectives were agreed through KPIs and OKRs. “This provided a solid baseline for tracking progress, guiding actions, demonstrating growth and embedding accountability,” says Chehayeb.
Financial Stabilization
One of the workstreams involved the implementation of a holistic approach to financial stabilization. “We conducted a comprehensive analysis of the company’s cash conversion cycle,” Chehayeb notes. “Optimizing this cycle was critical for maintaining liquidity and operational efficiency.”
A more robust budgetary process was also established to ensure accurate financial planning, efficient allocation of resources, and improved financial oversight.
Restructuring for Efficiency
To further strengthen its position, the Saudi company underwent a comprehensive restructuring process. “Our team worked closely with the company’s leadership to identify areas of inefficiency and implement strategic changes.”
This restructuring aimed to streamline operations, reduce costs, and improve productivity. A comprehensive approach was used to make decisions about discontinuing or merging divisions, creating a more efficient strategic mix of SBUs.
Strengthening Internal Operations
Caliber Consulting also focused on strengthening the inner workings of the company. “Enhancing internal processes and fostering a culture of continuous improvement was essential,” Chehayeb emphasizes.
Diversification and Digitalization
To reduce operational risks and catalyze growth, Caliber Consulting advised diversifying the portfolio of products and services beyond the oil sector, as the company was more than 80% reliant on this sector. This included creating a digitalized, future-proof identity for the company by offering new generation products and services.
The external management consultants also recommended focusing on accelerated growth through acquisitions and strategic partnerships, leveraging the growth of Vision 2030. A new injection of qualified hires was advised to empower the newly established divisions.
The results that materialized from the different workstreams provided a significant boost to bottom line: the company realized a 62% increase in revenues and threefold growth in profit margins within 18 months, along with a significant improvement of 0.12 in organizational health (measured on a scale of 1 to 5).
“The transformation helped the client realize a 62% increase in revenues and threefold growth in profit margins within 18 months, along with an improvement in organizational health.”
Preparing for an IPO
A key part of realizing the company’s future ambitions was to go public. “That is a complex process,” says Chehayeb, “and requires thorough preparation in terms of organization, financials, governance, and reporting.”
“We guided the company through every step, ensuring compliance with regulatory requirements and market expectations. We also helped professionalize the organization by establishing corporate governance, making it IPO-ready.”
During the process, Caliber Consulting provided strategic counsel, helping the management team weigh the benefits of taking the holding public or focusing on strategic divisions through a phased approach. “That work helped shape the approach followed for the IPO.”
Conclusion
Fast forward to today, and Chehayeb looks back with pride at a high-impact and successful engagement. “We are delighted to have played a crucial role in transforming the company’s in the present and future. At Caliber Consulting, we believe in leveraging our expertise in strategy implementation to not only enrich our clients present state, but also equip them for a prosperous future.”
