Prometheus Consulting - Organisation Development and Strategic Human Resource Consultancy

 Demergers 

Here is an action summary of key points to manage and watch out for when managing the organisational and people aspects of a demerger.

Planning the demerger

  • Consider what management competencies will be needed.
     
  • Recognise key decisions to be taken.
     
  • Identify relevant success criteria (both hard and soft) against which to assess the demerger process as it proceeds separately from the eventual outcome.
     
  • Understand the human resource risks, and how to combat them.
     
  • Understand the relevance of the culture to demerger success.
     
  • Plan to track the demerger in real time to inform the progress of the demerger. Capture unfinished business. Generate useful PR and learning material.
     
  • Understand the dynamics of the process, including the shifting collaboration and competition between component businesses and head office.
     
  • Let managers know what to expect and what to do.
     
  • Know how and when to communicate to the various stakeholders.
     
  • Know how to get value for money from professional advisers.

Looking ahead

  • What past strengths should the new organisation try to hold onto?
     
  • What opportunities does the demerger offer to create a different kind of organisation?
     
  • What head-office 'parenting style' will be appropriate for the future business?
     
  • How should the demerger affect management development programmes?
     
  • What administrative practices that existed to serve the pre-demerged organisation will need questioning in the context of the new organisation?
     
  • How will the new organisation avoid recreating the problems that the demerger was intended to solve?
     
  • What will the organisation learn from the way the demerger process is managed?

For more information on best practice, see Demerging Organisations: A Guide to Best Practice, Financial Times Management (an imprint of Pearson Education), author William Tate, 1999.