The question
The group's construction company wanted to grow beyond building for its own sister companies and enter the privately financed infrastructure market, public-private partnerships and service-provision projects. Leadership needed to decide which sectors and types of projects to compete in, and how to organize for it.
What everyone assumed
The natural reading for a builder is that projects are won by knowing how to build. In financed infrastructure that is not the case. Firms compete on choosing the right project, structuring it, financing it and operating it for years.
How we solved it
We rebuilt the financed infrastructure value chain, from structuring to operation, to see where value is created and where it is lost. We designed an economic and financial model to compare sectors, highways, ports, airports and social infrastructure, and to prioritize the project types with the best mix of return and risk.
We then designed the new business's organization and its relationship with corporate, so the subsidiary could compete autonomously without losing the group's backing.
The decision
The group decided to enter the market through a specialized subsidiary and focus on the prioritized sectors and projects, instead of bidding on every tender available.
What applies to other companies
Entering a new market with the logic of the old business is the most common way to fail in it. The capability that brought success in one business is not always the one that decides the next.
The first decision is not how much to invest, but which projects to stay out of.