Strategy Execution Life Cycle – Formulating and Documenting, Approving and Endorsing
Background context – A mid-Tier oil and gas asset services company has grown strongly over the past five years enjoying strong year-on-year growth and industry average EBITDA margins. The business leveraged a special regulatory accreditation that limited competition at tenders and helped to underpin this growth. The regulatory accreditation has delivered a strong organisational capability platform – more mature than otherwise expected for a business of this scale. The business has reviewed a range of step change acquisitions but has been unsuccessful in both valuations and gaining support from its parent shareholder.
Strategic Challenge – A changing industry dynamic determines that the special regulatory accreditation is unlikely to be a meaningful source of competitive advantage in the future i.e. future growth will unlikely come from simply scaling the old strategy. Competition in the asset services space has increased from specialist on and offshore asset service providers and large multi-industry diversified EPCM and asset management contractors. The company’s capability in digital data capture, aggregation, and analytics and in new business/client development are weak.
Strategic Activities – The leadership team wanted to run a strategy workshop to debate and align key executive leaders around the future business strategy. This required an analysis of the current state (both financial, competitively and in terms of the capability platform), reconfirmation of the strategic identity of the business relative to alternatives, and identification of key strategic priorities that would form the backbone of execution planning. The implications of the proposed strategy on the organisational structure, on capital investment decisions and modified capability platform were defined as part of implementation planning.
Outcomes – A new 2025 strategy was syndicated with executive leaders and documented in a Board paper for approval by the parent company shareholders. The Strategy was approved by the Board. The Executive team aligned around a detailed strategy implementation plan over three time horizons – including the build out of an acquisition watchlist with alignment around relative attractiveness in support of the strategy.