More Strategy Challenges Than Ever: We Are Here And More Than Qualified To Help

In yesterday’s Sunday Recap (Free to read – linked here) we highlighted some of the many unusual challenges facing important business strategy decisions today, both for traditional businesses and for new entrants in the climate change and sustainability-related industries. For the traditional industries all the current data may be meaningless and a poor predictor of what is to come, while the economics of NOW is still driving investment decisions. For the new industries, unrealistic assumptions around future economics will likely lead to plans not becoming projects and/or projects losing money. We are busy helping companies identify what is irrational exuberance versus what is real, and we can help more. More than at any time in our 35 years of consulting and research experience, a second opinion is necessary.

In summary, we see a lot of bad ideas being pursued (traditional chemicals and clean energy) by companies that have either not enough analysis behind their projections and assumptions or who are believing the rhetoric rather than doing the work. In many cases, there are near-term PR or political drivers, in other cases it is defensive, and in others, it is driven by cash flows.

1. “We have to do something in ESG to make our shareholders happy.”
2. “They have a green hydrogen project in their country so we should too.” This one is getting a little ridiculous at this point given the potential for inflation in renewable energy costs rather than further declines.
3. “Chemicals is the only long-term growth avenue for oil – so we should build more chemical capacity.”
4. “Prices are high, and we are making a ton of money – plus our customers say we should expand.”

Every one of these reasons may be good for certain investments, but today there are far more projects being discussed on these terms than should go ahead. We fear that many companies could lose a lot of money and at the same time fail to achieve any of the primary or secondary objectives.

At C-MACC we have a growing list of clients to our subscription services, but the real upside surprise has been the level of bespoke work that we have seen, given our relatively short company history and also given that we are not alone offering these services, whereas our subscription product is unique.  

More and more companies are looking for a sounding board as they look at strategies that might be tangential to their norm and as they face shareholders with a changing perspective around what is important. C-MACC offers a collection of experiences and skill sets that combine well in these situations:

1. We understand the chemistry (and it is all about chemistry) and the engineering required to make something commercial.
2. We understand economics – both broadly and at the project level and have decades of financial modeling and project economic experience.
3. Our subscription client base includes both manufacturing companies and investors (public and private) – allowing us to have many relevant discussions.
4. We are not interested in supporting an initiative for our clients – we are focused on making sure that it is the right initiative – pursued in a way that offers the highest reward versus risk opportunity. We are not paid based on a success fee – so we have no issue telling a client to stop something.
5. With the wave of “new” initiatives, we bring significant experience with project successes and failures and can apply the learning from both, especially in many of the subjects du-jour; CCUS, Hydrogen, biomass, and water are some specific examples.
6. Our Subscription Products and their production process ensure that we are always current on almost any relevant subject/product/initiative.

We have expanded our staff and we have a contact base that puts us one degree of separation from any expert we would need to augment a project. Visit our site to get in contact.