Successful Divestiture Through Expert Intervention
Background
A Large Global Manufacturer announced a $4 billion carve-out of one of their business lines, operating across Asia and Europe. They initially enlisted the services of a prominent consulting firm, herein referred to as BIG X, which assembled a team featuring roles such as "Relationship Manager," "Strategic Engagement Partner," "SMO Lead," and "SMO Program Manager," among others. The rates for these roles ranged from $375 to $600 per hour.
Problem Statement
As the Separation Management Office (SMO) was being established, the Global CIO of the manufacturing company grew increasingly concerned about the lack of experience within the BIG X team. Many team members functioned merely as "note takers" rather than leaders capable of driving the project forward. They struggled to facilitate workshops and ask critical questions pertinent to each business function. Despite multiple concerns raised by the CIO, BIG X failed to correct the course or replace underperforming team members.
The situation reached a boiling point when the CIO discovered that many of the BIG X team members, although from prestigious universities, had no practical experience. A notable example was the individual assigned to support the manufacturing function, who admitted never having seen a shop floor or warehouse. Furthermore, their ERP system was nearing the end of its lifecycle and needed replacement concurrently with the separation. The IT lead, while knowledgeable in theory, lacked experience in leading a team, putting the entire IT workstream at risk of failure.
Solution
Frustrated, the CIO reached out to MAD Advisory Services, a practitioner-led M&A IT and PMO staffing firm. Within a day, MAD Advisory assembled a team of experts and, after a few calls with the CIO and her team, proposed a rough assessment and path forward in just two days. In addition, MAD’s working model to stand by their promise and provide Complimentary Engagement Leadership further reinforced the CIO’s resolve to retain this practitioner led firm.
Implementation
MAD Advisory swiftly staffed the entire team within a week, compared to the two-month lead time projected by BIG X. Within the first 30 days, the MAD PMO lead and her team established a robust SMO Model featuring governance, reporting, accountabilities, and detailed functional work plans. The SMO Lead was proactive in identifying risks, issues, and immediate key decisions that needed to be addressed.
Outcome
The collaborative effort among the SMO, workstreams, CIO office, and the divesting entity spanned over 15 months. Despite long hours and extensive global travel, the divestiture was successfully completed within the stipulated timeframe..
The successful completion of the divestiture allowed the client to showcase her skills in value creation, strategic decision-making, and effective people management, to the CEO and Board of Directors and led to her promotion to Executive Vice President.
The switch to a more experienced and agile firm, MAD Advisory, resulted in a cost saving of nearly 40% compared to the expenditure on BIG X.
Conclusion
The client's decision to bring in MAD Advisory Services not only ensured the success of the divestiture but also highlighted the importance of practical experience and swift, decisive action in managing complex projects. The CIO's proactive approach and MAD Advisory’s expert intervention were pivotal in overcoming the initial setbacks and achieving a successful outcome for almost 40% lower costs.
About MAD Advisory Services
At MAD, we stand by our experts and our commitment to providing genuine value.
Unlike other management consulting firms that bill clients outrageous rates for extraneous resources like "Engagement Managers" and "Relationship Managers," our leadership team takes a hands-on approach.
Our leaders play the role of Complimentary Engagement Manager for 5-10% of their time, ensuring top-tier guidance and oversight without any additional billing.
This approach not only reflects our dedication to cost-efficiency, but also guarantees that our clients receive the highest level of expertise and attention from our most experienced professionals.
At MAD, you get the best, without the extra cost.