Breaking Up Is Hard To Do

fissure

Corporate breakups are the new black. And Wall Street is buzzing as company after company looks to spin-off to create greater value for shareholders, despite the weak economy.

With all the commotion, it can be easy to forget that breaking up is hard to do – especially for the newly independent entity. While separation can be a time for new beginnings and fresh starts, the transition into independence is a huge change, one that usually generates more questions than answers.

Initially the focus is on who gets to keep what. Assets are broken up in what is too often a chaotic and emotional process. When the dust settles, issues arise that are not so easy to solve. Issues come to light that require careful consideration and introspection. In the past, as part of a larger entity, the spin-off’s identity largely came from the corporate brand. Now, the divested company must figure out what part of the past to move forward with, how to make up for what is left behind and what should be completely new.

And therein lies the true challenge, and opportunity, of any spin-off: same business, same people, different story. The change in business strategy that comes with any major restructuring is really just the first step. When business strategy changes, so too must the brand. Only when the two are aligned can a company realize its true growth potential.

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