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MCKINSEY

Achieving win-win spin-offs

Achieving win-win spin-offs

mckinsey.com

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A corporate spin-off

A corporate spin-off can set a parent company free from capital and bureaucratic constraints so that it can pursue alternative strategies.

Four factors are critical for creating successful spin-offs:

  • A quick transition toward growth
  • Operational excel...

Research shows that revenue growth is vital to determine a spin-offs success. The management teams of both ParentCo and SpinCo can often explain how growth is part of the spin-off's strategic rationale together with improved capital management and operational changes. But they ar...

Companies that successfully execute win-win spin-offs will optimise the operating model for both companies. 

For example, companies use the opportunity to increase their marketing expenditures or digitising the sales process. Others would attempt to improve, centralise, or ...

Companies often encourage spin-offs to free up management's time to refocus on the core business or launch a new business. But it can be difficult to focus on the big picture, particularly for the SpinCos executives who have to develop and execute new strategies.

Executives...

A core question in most spin-offs is how to allocate talent as each company wants to keep the best people. It is noted that successful spin-offs assess the cultures and capabilities each company would need to succeed.

Some identified critical roles that wou...

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