WHO AND HOW?
WHAT WE DO?
Value Enhancement Triad
We believe that the best result can be achieved when Value Enhancement process simultaneously focuses on Strategic Initiatives, Operational Improvement and Financial Aspects. We call such a combined approach Value Enhancement Triad.
Strategic Initiatives examples are:
- vertical integration — acquisition of suppliers or distribution channels;
- horizontal integration — acquisition of competitor or a substitute products producer;
- penetration into new markets;
- launch of new products;
By Strategic Initiatives we mean projects that have a significant impact on Corporate Strategy and company’s existing business model. Strategic Initiatives are the major source of a company’s value growth.
Strategic Initiatives could be originated in course of strategic planning or could emerge spontaneously from the company day-to-day operations. We share generally accepted approach to strategic planning:
- strategic analysis;
- identifying strategic initiatives;
- initiatives evaluation and selection;
- implementation action plans;
- results and reviews.
At each stage of strategic planning process we use world-class models and approaches. When necessary we cooperate with recognized top-level experts to bring in specialized functional or industry expertise.
We define Operational Improvement wider than traditional view does. By Operational Improvement we mean continuous process of improvement in the areas of:
- Cost Management
- Working Capital Management
- Information and Reporting
- Stakeholder Management
- Corporate Structure
- Corporate Governance
- Risk Management and Internal Controls
Based on our experience we have formulated a number of projects and initiatives in the above areas to be performed to improve a company’s operational performance.
Value Enhancement process has numerous Financial Aspects, among the most important are:
- Financing Company Development
- Financing Company Operations
- Debt Portfolio Management
- Financial Modeling and Valuation
- Financial Analysis and Forecasting
For each of the Aspects we have developed the approach that leads to the enhancement of the company’s value, identification of significant financial risks and generating the risk mitigation plans.
WHO AND HOW?
Company Governing and Managing System
Company Governing and Managing System consists of three constituent parts: Governance and Management Structure, Governance and Management Policies, Procedures and Processes, and Information for Decision Making.
Governance and Management Structure
Governance and Management Structure is composed of a company’s governing and managing bodies, their tasks and matters reserved to, levels of authority and authorization procedures.
Typical company’s governance bodies are:
- Board of Directors and its committees (Remuneration and Nomination, Audit, Financial, Strategy, etc.)
Company’s management bodies are:
- Chief Executive Officer
- Management Committee
- Functional committees under CEO (Procurement, Budget, etc.)
Based upon a company’s specific situation and world-class Corporate Governance practices we will propose:
- the structure of the company’s governing and managing bodies;
- their policies and procedures;
- delegation of authorities that ensure hands-on management and control but without unnecessary bureaucracy.
Policies, Procedures and Processes
For the efficient performance of Governance and Management System the clear and comprehensive Policies, Procedures and Processes must be in place to rule the various interactions between the company, its governing bodies and external environment.
We will analyze the existing policies and procedures, and test how these are followed and the quality of the feedback.
We will propose changes to the existing policies, procedures and processes if necessary.
Information for Decision Making
All management decisions require complete, accurate and timely information. The sources of such information are financial and operational reporting.
We will examine the financial and operational reporting the company’s governing bodies use and propose changes to the reporting structure and formats if necessary.
Generally the practical implementation of Value Enhancement process has three stages:
Our Authorization. Fine-tuning of the company’s Governing and Managing System
Our approach suggests that the ultimate results of our involvement are the completed projects and enhanced company value. To run the process successfully we need enough authority that allows us:
- At the stage of generating the company’s Value Enhancement Program — to efficiently communicate to the company’s owners and management.
- At the stage of practical implementation – to successfully complete the tasks within the set deadlines and with the resources allocated.
By agreement with the company’s owners and other stakeholders we are appointed to the company’s Board of Directors and its committees, and sometimes to Executive management.
Having become the company’s insiders we will:
- Test the current Governing and Managing System for its ability to efficiently manage Value Enhancement process.
- Propose changes if necessary.
Comprehensive Analysis and work out of Value Enhancement Program
The company’s Value Enhancement Program represents list of projects within the framework of Value Enhancement Triad (Strategic Initiatives, Operational Improvement, Financial Aspects) to be undertaken, prioritized by their importance to the company, with the timeframes and the required resources.
- conduct the comprehensive analysis of the company;
- draft the company’s Value Enhancement Program;
- discuss the Program with the authorized stakeholders;
- get the Program approved for the practical implementation.
The comprehensive analysis of the company covers:
- External environment
- Internal environment and Culture
- Corporate Strategy
- Marketing Analysis
- Financial Analysis
- Resource Audit
Implementation of Value Enhancement Program
The practical implementation of the Value Enhancement Program is managed at two levels:
- the company’s Owners and Board of Directors monitor the general progress of the Program and guide the Executive management to reach the Program’s goals;
- the Executive management allocates the company’s resources to particular projects and performs day-to-day project management.
The implementation of the Program is synchronized with the company’s business-planning and budgetary cycles:
- particular projects, steps and tasks are set for each budget period;
- regular monitoring of the Program’s progress is performed;
- the Program can be changed, extended or ceased if necessary.