ORGANIZATIONAL RESTRUCTURING

FOR A DIVERSIFIED GROUP OPERATING IN JAPAN, TURKEY AND UAE

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Background: 

A diversified conglomerate with core businesses spanning construction, retail, real estate, hospitality, and manufacturing was facing challenges in maintaining agility, optimizing costs, and driving innovation. The group consisted of 5 core businesses employing 5,000 staff. Despite its success, the group sought to explore new business opportunities and create a more flexible and efficient organizational structure.

Challenges:

1. High Operational Costs: Managing five distinct business units independently resulted in high operational costs and duplicated efforts.

2. Slow Decision-Making: The existing hierarchical structure slowed down decision-making processes, affecting the group's responsiveness to market changes.

3. Limited Agility: The traditional structure lacked the agility needed to quickly adapt to new business opportunities.

4. Funding New Ventures: The group aimed to launch new startups for the next generation of the family without significantly increasing overall operational costs.

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element's Approach:

Shared Services Model:

• Introduced a shared services model to centralize and streamline common functions such as HR, finance, IT, and procurement across the group’s business units.

• Established a central services hub to manage these functions, reducing redundancy and achieving economies of scale.

Cost Optimization:

• Conducted a thorough cost analysis to identify areas of inefficiency and potential savings.

• Implemented standardized processes and leveraged technology to automate routine tasks, significantly reducing costs.

  
  

Improved Decision-Making:

• Flattened the organizational structure by reducing hierarchical layers and empowering mid-level managers to make decisions.

• Enhanced communication channels to ensure faster and more effective decision-making.

• Created cross-functional teams to work on strategic projects and new business ventures, fostering collaboration and innovation.

• Introduced agile methodologies to improve project management and execution.

• Reinvested the cost savings achieved through the shared services model to fund the launch of new daughter companies.

• Focused on startups in high-growth sectors to diversify the group's portfolio and reduce dependency on its core businesses.

  
  

Business Agility:

• Created cross-functional teams to work on strategic projects and new business ventures, fostering collaboration and innovation.

• Introduced agile methodologies to improve project management and execution.

• Reinvested the cost savings achieved through the shared services model to fund the launch of new daughter companies.

• Focused on startups in high-growth sectors to diversify the group's portfolio and reduce dependency on its core businesses.

  
  

Funding New Startups:

• Reinvested the cost savings achieved through the shared services model to fund the launch of new daughter companies.

• Focused on startups in high-growth sectors to diversify the group's portfolio and reduce dependency on its core businesses.

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Results:

1. Cost Savings: The shared services model resulted in a 15% reduction in operational costs across the group, freeing up resources for reinvestment.

2. Increased Agility: The new structure allowed the group to respond more swiftly to market opportunities and challenges, enhancing its competitive edge.

3. Successful Startups: Launched 8 new startups, employing an additional 500 staff, without increasing the overall operational costs.

4. Enhanced Decision-Making: Streamlined decision-making processes led to faster implementation of strategic initiatives and improved business performance.

5. Employee Satisfaction: Improved communication and empowerment of employees resulted in higher job satisfaction and reduced turnover rates.

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Conclusion: 

element's introduction of a shared services model and strategic organizational restructuring enabled the client to optimize costs, improve decision-making, and enhance business agility. The successful launch of new startups without increasing overall costs demonstrated the effectiveness of the transformation.