Translating high level strategic objectives into concrete and detailed action plans can be difficult but with the right Impact support it can be attainable. Our approach to strategy combines ‘stress-testing’ of key assumptions with an inclusive, leadership-driven process that ensures optimal positioning for implementation success.
A development agency required assistance in facilitating workshops and internal discussions, as well as drafting key planning documents as part of its annual strategic planning process. The focus of the strategic intervention was to assist the agency identify and overcome challenges to strategy execution and to provide a framework for the preparation of an annual performance plan.
A three phased approach, anchored around workshops, was used to help the agency with each year’s planning process:
Phase 1: Workshops preparation
- Document review and planning meeting with the strategy team to fully understand expectations and setup focus interviews
- Develop questionnaires and conduct focus interviews with members of the board and executive
- Analysis of results and preparation of a report on challenges identified
- Meeting with team to finalise workshops agenda, breakout sessions and logistics
Phase 2: Workshops facilitation
- Facilitation of workshop with board and executive team, including breakout sessions
- Capturing of outputs from the sessions, and development of an output pack for use in the management workshop
- Facilitation of the management workshop with a focus on the development of KPIs to help the organisation implement strategy
Phase 3: Output consolidation
- Preparation of report detailing the outcomes of each of the workshops, including decisions on next steps
- Drafting of consolidated strategic plan for submission to the relevant stakeholders.
The key outcome from the workshops was a defined and clear way forward for the development agency on the issues of importance each year. The workshops helped identify the barriers of execution to help leadership focus its effort, understanding the key issues and challenges with their annual performance plan. Further, strategic goals, initiatives and KPIs were developed to advise the annual performance plan.
Pricing Review & Concession Valuation
A port development company needed to review its pricing strategy to ensure that port tariffs could cover future funding requirements while maintaining competitiveness. In addition, it was looking for assistance in determining a fair value to charge interested parties for a long-term concession agreement for terminal operations.
The Pricing strategy approach comprised of the following key activities:
- Perform a financial ring-fencing of the 3 business entities under the company (marine, port authority, terminal operations)
- Review all prices/tariffs/charges of the 3 business entities to ensure their appropriateness and assess the financial sustainability of the 3 business entities considering future capex requirements and expected volume and revenue growth
- Develop a revised tariff book based on the proposed changes to the various individual tariffs.
The Concession valuation followed a 3-step approach:
Step 1 –Set the foundations involved agreeing on key parameters for the concession (such as duration, exclusivity, cargo types, CAPEX contribution, etc.) as well as building an integrated valuation model (throughput, operational, financial).
Step 2 –Perform the analysis involved extensive market research on commodities flows to determine realistic forecasts for some key variables such as volumes and rates, as well as internal financial analysis focused on forecasting CAPEX and OPEX for the duration of the concession.
Step 3 –Define the value involved in stress-testing the output from the model against comparable transactions. This step also focused on defining some key terms of the transaction such as the split between fixed rental fees vs royalties, and the amount of upfront payments.
The pricing strategy helped align the company’s tariff book with international best practices and resulted in the adjustment of some tariffs that were either outdated or not on par with best practice. The project also delivered a financial model that could be used to test various scenarios including the introduction of temporary levies to cover funding shortfalls for specific capital investments. The valuation exercise provided a strong factual basis for the company to assist in the negotiations with a potential concessionaire and extract more value from the opportunity. As a result of our support, an initial offer was subsequently increased by a factor of 10.
Strategy Review & Turnaround plan
A national water authority had established a new Board of Directors and had developed a 5-year strategic plan with ambitious strategic goals and targets. However, it faced numerous challenges in achieving these objectives due to the economic climate that perpetuated challenges. The water authority thus sought support to complete a strategic review with the key objective being to assess the overall organisational readiness to successfully execute the strategy. Recommendations on refinement of strategic imperatives as well as detailed plans for execution of each strategic imperative were also required.
A 2-phase approach was adopted for the intervention.
Phase 1: Gap Analysis focused on assessing execution readiness for each strategic goal and vertical market, as well as identifying key gaps to be closed.
Phase 2: Solution Design focused on developing blueprints for execution including roadmaps and implementation plans for each strategic goal and vertical market.
Readiness to execute the strategy was assessed based on 5 key dimensions:
- Financial Viability and Pricing: develop financial model to assess the commercial viability of planned projects/investments and develop options to close funding gaps through projects scrubbing and/or alternative funding models incl. tariff adjustments
- Operational and Capex Capability: review key business processes and operational performance to assess the organisational capability to execute from an operational perspective
- Resources and Skills Availability: review critical skills and future resourcing requirements to assess the organisational capability to execute from a people perspective
- Stakeholders Alignment: engage key stakeholders to assess the level of alignment and support on the strategic plan and confirm expectations
- Private Sector/Donors Involvement: engage key potential execution and/or funding partners to assess their appetite for collaboration
The strategy review identified several issues and challenges that were preventing the company from achieving its strategic goals. To address the issues, the team developed a turnaround strategy and plan for the organisation composed of detailed charters and timelines for key initiatives and a robust business case consolidating the expected financial benefits and implementation costs of each key initiative.