An Asian construction company recognised it would be a challenge to sustain growth and profitability, particularly in an industry where low margins are imperative.
An Asian construction company, spanning more than 70 business units, had benefitted from rapid growth on a global scale, but as construction activities slowed in its main markets, the company’s leadership recognised it would be a challenge to sustain growth and profitability, particularly in an industry where low margins are imperative. They approached Challenge Advisory for support in revising its five-year strategy for keeping ahead of the competition, nurturing and growing new businesses internationally, as well as restructuring the organisation for greater future agility.
Challenge Advisory’s infrastructure and strategy teams were recruited to help the client to implement its strategy and to strengthen its leadership development in order to follow through on this strategy. The combined teams compiled a plan to develop the entire engineering and construction firm’s organisational structure. This began with a comprehensive exercise designed to test the creativity and lateral thinking across the client’s 70-plus business units.
The units were all encouraged to challenge current ways of thinking, with room to think up new organisational mechanisms and ideas that could possibly scale up throughout the client’s organisation. Secondly, the infrastructure and strategy teams helped to identify the most profitable areas for growth, locally and internationally. Collaborating with decision makers and senior managers, Challenge Advisory identified the priority sectors, and compiled blueprints that would best achieve objectives.
This new strategy, concluded Challenge Advisory, would require an overhaul of the client’s organisational structure. Before recommending a new structure, the two teams collaborated to gain data reflecting several different opinions. This new structure separated the more mature business units, while pairing together units with high commonality so they would each have a market peer. Finally, Challenge Advisory assisted the client in constructing a new leadership program that would be more effective at cultivating personal awareness, aligning growth objectives with personal career goals, and driving action by way of introducing improved empowerment.
The company achieved rapid growth with the help of the strategy and infrastructure teams. Since implementing the strategy four years ago, the client’s revenues grew at a compound annual growth rate exceeding 15%, and margins remained strong; double the industry average.
The client also saw a quantifiable improvement in leadership behaviours as well as on-the-job performance. An internal pipeline was created to fill important roles at all levels. The participant-driven breakthrough projects also increased by over $250 million a year.