The Dow Chemical and DuPont merger is the most recent of many announced corporate split ups in 2015 including Ashland Chemical, Air Products, Alcoa, GE, Hewlett-Packard and SPX. Sometimes the spins-offs are driven by activist investors, others are planned to forestall activist intervention. The Dow-DuPont merger and three-way split-up will take at least 2 – 3 years to pull off. The split-ups and spin offs mean a lot of disruption, multiple rounds of lay-offs and pressure for quick performance at the new entity. In the meantime, how do these companies stay focused on their customers and continue to grow their business?
|Life During Activist Investors|
I asked senior executives at some of these new companies how they keep the customer “Wow!” factor in the middle of so much distraction and uncertainty. These senior leaders identified the organizational priorities and employee skills needed to survive in the new environment and to deliver to customers at the same level as before.
Outward looking: As a spin-off goes from being part of, for example, a $6 billion company to being a stand-alone $2 billion company, it may risk diminished brand recognition and market presence. It could lose access to money, talent, international sales networks. An employee who is outward looking, who knows how to find resources outside the company, for instance, to build an international distribution network, will be extremely valuable.
|How can you stay focused and WOW |
Everyone will be a trainer now: With fewer employees doing more, everyone will need to chip in. Technology, customer service, marketing and leadership skills are examples of areas where all employees will benefit from getting a training retread.
Strong operations: A benefit of getting smaller is that companies are more nimble, less layered. Employees may enjoy this but things may slip between the cracks. Bigger companies have the luxury of redundancy of process to ensure quality and delivery. Smaller companies need strong operating performers at the top to make sure that quality and performance prevail and that customer problem solving remains a top priority.
Digitally aware: Companies often look to cut costs in payroll, IT and other shared services areas. These days, digital tools can be substituted in areas like skills and skills gap assessment. Companies can use social media to communicate with employees as a way to support “Town Hall” meetings and to reinforce training. Advanced technology can also help plan manpower resources required for expansion and growth.
Effective in small teams: To carry out the split ups, companies such as Ashland and Valvoline have created small transition teams in functional areas. There is an overall perception that large corporate departments are less and less effective. Small teams with laser-like focus are better at spawning innovation, marketing breakthroughs and holding people accountable.
For example, when it announced its merger with Dow, DuPont also announced that it is breaking up its Central Research & Development unit in Wilmington. In its place it created a much smaller successor "Science and Innovation" unit to which it assigned only 10% of its research PhD chemists. The company will reassign up to 1/3 of its research chemists to business units around the company and will lay off at half of them. (source: Philly.com).
In this new “small team” world, employees with those strong team player skills will be most valuable.