Hundreds of divisions and operating units are divested or spun off by their corporate parents each year. Some are integrated into the operations of their corporate acquirers. Many others become independent business entities that must stand on their own. This report draws on the experience of Mercer consultants and HR executives who have dealt directly with the challenges of “standing up” former corporate units into independent companies with their own leaders and business functions, including HR.
The collective experience of these direct participants points to four areas where the attention of HR executives is critically important: leadership and talent management; organization culture; legacy programs and costs; and building the HR infrastructure.
Adam Jenkins is a fictitious character, but there is nothing contrived about the situation he faced. In 2007, several hundred operating units and subsidiaries worldwide were spun off by their parent companies. Some were integrated into the operations of corporate buyers. Others were cobbled into joint venture companies. More than a few have become independent enterprises owned by private equity firms, and many of these will go public in three to five years.