After the Board meeting is before the Board meeting

 

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In my role as Strategic Portfolio Adviser to the Executive Board, I played an important role in shaping the strategic direction of our portfolio. I collaborated closely with the management team of a leading multibillion-dollar business unit, known for its robust growth and broad portfolio, which included several mature core products, emerging initiatives, and a newly acquired business. Despite its success, the unit faced the challenge of meeting high revenue and profit expectations with very limited money to spend on new top line initiatives, following substantial investments in upgrades and migrations to reduce technical debt.

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A significant hurdle emerged when the recently acquired company presented a substantial overlap with an existing core product, failing to deliver the anticipated synergies due to differing market segments and sales strategies. This situation prompted a strategic reassessment, considering a divestiture to streamline focus, despite potential short-term revenue and profit impacts. The business unit's leadership envisioned this move as a precursor to acquiring a promising startup in a related field, aiming to realign strategic objectives.

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The initial business review in December did not go well: It was overloaded with too many topics, and there was little expectation management about the expected goals and outcome. At times it felt like throwing stuff against the wall to see what sticks.

I was able to channel key points of the discussion into a deep dive to explore divestiture and partnership options of the acquired business. In the runup to the next business review meeting I worked with key stakeholders to help position the acquired business for sale as a standalone entity.

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By March, there was fact based consensus on the divestiture's strategic benefits, including capital reallocation to more aligned initiatives and enhanced organizational focus. Following the strategic groundwork, the board green-lit the internal due diligence process, setting the stage for the business's sale. The Executive Board appointed an acting CEO to steer the transition and initiated an auction process. The sale, announced in May, concluded successfully in December, marking a significant milestone in the strategic realignment and exactly one year after the topic was first raised.

This undertaking reinforced my role as a trusted adviser in high-stakes M&A and divestiture discussions, acting as an objective and independent voice to safeguard shareholder interests and ensure there was a strategic rationale behind the proposed divestiture and ensuring it aligned with the company's long-term goals.

This article was first published on LinkedIn on March 26, 2024