For the fifth time already, strategy professionals from different industries met at the SOLYP Strategy Circle in Frankfurt am Main last Thursday to network and share their knowledge, experience, and ideas in a small and familiar setting. As keynote speakers, Janina Kaiser of K+S Group and Mirko Rajs and Marcus Schueler of the consulting firm MHP offered valuable insights into the strategy work of their organizations sparking fruitful discussions among the participants.
Strategic Market Intelligence at K+S Group
The long-established German company K+S with more than 14,000 employees worldwide in one of the world's leading suppliers of potash- and magnesium-based products for agricultural and industrial applications and the world's largest producer of salt products. While the industry is seeing growing demand, price pressures in the commodity business and market entries of new competitors have been posing new challenges to the MDAX-listed company headquartered in Kassel in recent years. This development, Janina Kaiser concluded, made a more strategic management approach necessary. Therefore, in 2015 the decision was made "to restructure the company’s strategy work and raise it to new level." Rather than pursuing individual strategic projects with strong M&A focus, the Potash and Magnesium Products business unit now relies on a continuous, well-structured strategy process which is managed by the newly created department Business Origination & Strategy.
The Potash and Magnesium Products business unit now follows a classic bottom-up approach to strategic planning. At the beginning of each planning cycle, market data is collected and analyzed at the regional, product, and application level. Afterwards, business unit strategies are jointly planned and submitted to the board for final decision-making.
This started a lively discussion among participants whether regions and business units should plan jointly or independently of one another. As it turned out, the organizations of the participants followed different approaches in this respect. While some, like the K+S Group, pursued a collaborative planning approach, others preferred an independent planning approach in order to be able to identify possible gaps between regional and business unit strategies. Here, the task of the central strategy department is to compare and validate the plausibility of the developed strategies. While this is time-consuming, as one participant pointed out, it can be done easily having the right software support.
In the future, the Potash and Magnesium division of the K+S Group intends to profit from such a software solution as well, said Janina Kaiser. The use of the Strategic Intelligence Software SOLYP3 is already in the planning stage and will be implemented shortly. When deciding on SOLYP3, three aspects played an important role, Kaiser continued to explain:
- The improved transparency of data as all those participating in strategic planning have access to the same system.
- The ability to collect in a systematic fashion both hard and soft data, such as trends, strengths/weaknesses, or opportunities/risks, which are essential for a comprehensive market analysis.
- The automation and standardization of the presentation of the data resulting in significant time savings and improved comparability.
After the successful roll-out in the Potash and Magnesium Products business unit, a group-wide roll-out of the software will be considered making it the standard tool for strategic planning within the entire organization.
Planning for the Digital Transformation at MHP
Just like any other kind of business, consulting firms need to be managed strategically. This is even more true when it is growing rapidly, as in the case of the Porsche subsidiary MHP. Founded in 1996 with only five employees, MHP has now more than 1,500 employees at seven locations–numbers still rising.
With the increasing size of the company, there was also an increased need for strategic planning.
Additional drivers for this development were—similar to the K+S Group—the changed conditions in the market environment. Today, we live in a VUCA world (Volatility/Uncertainty/Complexity/Ambiguity), said Marcus Schueler, in which agility has become a decisive competitive advantage. And agility can only be achieved through effective complexity and information management.
Moreover, the megatrend digitization has fundamentally changed the ecosystem of the customers of MHP and, consequently, the type of consulting services that they demand. Rather than classic consulting services, customers are now increasingly asking for integrated service offerings that span from digitization strategy development to implementation. A focal point of the consulting services is new business model development, innovation, and transformation. Thanks to big data and advanced analytics, businesses now have a reams of data at their disposal leading to the development of entirely new business models. While in the past data was merely the product of existing business models, MHP now helps its customers in utilizing existing data to develop innovative new business models.
In the automotive sector as well as in many other industries, services linked to products will play a decisive role in the future. This trend will also change the requirement profile of consulting agencies. New competencies and skill-sets need to be built and developed in a proactive manner. That’s why MHP intends to focus on strategic competence and personnel management supported by the Strategic Intelligence Software SOLYP3.
At the end of the one-day event, Alexander Zimmermann, founder & CEO of SOLYP Informatik GmbH, gave the participants a brief outlook regarding the further development SOLYP’s testing and delivery services. In the future, a new test environment will be made available facilitating the participation of the customers at an early stage of system development and ensuring an even smoother project course.
We thank all participants of the 5th Strategy Circle for their valuable contributions and positive feedback, and we hope to welcome you again at one of our events!