ORGANIZATIONAL RESTRUCTURING OF A CIS AGRIBUSINESS
Companies often overlook the significant intrinsic value that lies in the appropriate design of their organizational structure. Adequately tailoring the structure to suit the company’s size, scope of operations and strategic objectives can generate strong savings, ensure business processes are functional and guarantee that the right people are in the right place, doing the right things.
The organizational structure, also commonly referred to as ‘operating model’, in this context, answers the question of how an agricultural business portfolio is managed along farm clusters and business functions to deliver on the objectives of the holding. It is an essential part of the company’s strategy because it is a key source of competitive advantage. The Operating Model focuses the organization on the key value drivers and on creating synergy across the portfolio of activities.
Adequately structuring the operating model is of particular importance for Agribusinesses in the CIS region given the nature of the strategic challenges they face: The wide spread of the land bank make the centralization of decision-making particularly challenging as the central holding must ensure that processes defined centrally are adequately rolled out. Best practice sharing between highly dissociated farms and clusters is typically quite low, a process which can be significantly enhanced by solid organizational structuring from the holding. Also, the recurrent problem with theft on the field makes effective central control of utmost importance to prevent losses.
Bryanston helped a leading CIS agribusiness with a large-scale organizational restructuring to reduce its cost base, enhance decision-making and improve business processes. The exercise was very successful, enabling the company to centralize key decisions, unlock economies of scale, ensure best practice sharing and improve its interface management.
The project was conducted over four major phases, starting with outlining the strategic boundaries of the operating model, mapping the current situation of the organization, deriving key learnings from industry benchmarks and interviewing senior management to understand the internal perspective. Stage two involved defining the role of the centre, detailing the key pillars of each major function and identifying the level of centralization of key functions within the company. In stage 3 followed the core deliverables of the project, including detailing the new organizational blueprint, drafting job descriptions and defining key business processes. Finally, stage 4 was the implementation of the updated organizational model with an elaborate and structured transition plan and communication plan.
The major project deliverables, produced at the outset of Stage 3 included:
Revised organizational charts based on the newly-defined organizational blueprint
Job descriptions drafted for each new position and Key Performance Indicators (KPIs) set
A detailed breakdown of all major business processes indicating who is Accountable, Responsible, Consulted and Informed throughout each process