Chemicals: Building a Pre-Divestiture Innovation System

As part of the $12bn merger between Dow AgroSciences and DuPont, three new companies were formed, which were later spun out as separate entities. One of these companies, composed of four smaller specialty chemicals businesses, has been operating independently since 2019.

OBJECTIVES

This company we worked with was one of the three new entities created by the merger. From the outset, innovation was recognized as a critical strategic capability essential for the company’s future success and growth in a competitive market.

WHAT WE DID TOGETHER

To support this objective, we benchmarked leading innovators in the chemical industry, both in the US and Europe, to identify best practices. A leading-edge framework was developed to guide the design of the company’s innovation system. Additionally, we engaged technical and commercial leaders from the four business units, facilitating their involvement in system design forums. Together, we crafted a custom-designed innovation system tailored to the company’s needs, which included governance, structure, processes, roles, responsibilities, and resource allocation.

THE OUTCOME

The design decisions made during this process will influence the company’s growth potential for years to come. On the day in June 2020 when the final business unit was spun off from the merger, the stock price for the remaining business rose by 18%, signalling strong market confidence and value creation expectations for the newly independent company.