If it ain't broke then it might need fixing

Breaking Up may be hard to do, but it's been catching on in corporate circles recently. ICI, British Gas and Hanson have all gone down this route in Britain, while ITT and 3M are in the vanguard in the US.

But, if the authors of a new book are to believed, these could just be the pioneers. "The future is clear. The traditional multi-business company is a dinosaur," write David Sadtler, Andrew Campbell and Richard Koch in Break Up! (Capstone, pounds 18.99). In its place will appear two types of organisation: the single business, which most multi-business companies (MBCs) started out as, and the focused business company (FBC).

The former is familiar and includes the likes of Intel and McDonald's. The latter is less familiar and differs in that the focus is not on a single business but on a set of corporate skills. Of course, many MBCs would claim that they fit this criterion. But the key is whether that set of corporate skills or resources adds value to each of the units within the organisation. Procter & Gamble and Disney are FBCs, they argue. And 3M, since it spun off its tapes business into Imation last year, has become one. But simply hiving off parts of the organisation does not make an FBC, say Mr Sadtler and Mr Campbell of the Ashridge Strategic Management Centre and their co-author, Mr Koch, who is an entrepreneur and consultant. "Bad break-ups create more MBCs or leave behind a rump that is still an MBC," they add.

The successful break-up needs to counter two causes of value destruction. The first is the corporate centre, described by the authors as the head office and/or other intermediaries between providers of funds and the operating companies. The second is the frictions that can come from bringing together incompatible businesses.

Although the authors say they are not suggesting that managers are under- performing, they claim a trillion dollars of value is locked up in over- diversified, unfocused groups. Break-ups will not just release that value but transform the capitalist system, they say.

Not surprisingly, given the stakes, they admit the process can be "traumatic". Among the tips for success are: be ready for resistance, move quickly, keep communicating and expect it to be a huge task.

Sport
Louis van Gaal and Arsene Wenger
footballLIVE: All the latest from today's Premier League matches
News
newsNew images splice vintage WWII photos with modern-day setting
Arts and Entertainment
The star dances on a balcony in the video
music
Arts and Entertainment
Jerry Hall (Hand out press photograph provided by jackstanley@theambassadors.com)
theatre
PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

US immigration: President Obama ready to press ahead with long-promised plan to overhaul 'broken system' - but will it get past a Republican-controlled Congress?

Immigration: Obama's final frontier

The President is ready to press ahead with the long-promised plan to overhaul America's 'broken system' - but will it get past a Republican-controlled Congress?
Bill Cosby rape allegations explained: Why are these allegations coming out now? Why didn’t these women come forward earlier? And why has nobody taken legal action?

Bill Cosby rape allegations explained

Why are these allegations coming out now? Why has nobody taken legal action? And what happens next for the man once thought of as 'America's Dad'
Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain

You know that headache you’ve got?

Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain
Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?

Scoot commute

Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?
Paul Robeson: The story of how an American icon was driven to death to be told in film

The Paul Robeson story

How an American icon was driven to death to be told in film
10 best satellite navigation systems

Never get lost again: 10 best satellite navigation systems

Keep your vehicle going in the right direction with a clever device
Paul Scholes column: England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil

Paul Scholes column

England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Michael Dawson: I’ll thank Spurs after we win says defender as he prepares to return with Hull

Michael Dawson: I’ll thank Spurs after we win

Hull defender faces his struggling former club on Sunday ready to show what they are missing. But he says he will always be grateful to Tottenham
Frank Warren column: Dr Wu has big plans for the professionals yet he should stick to the amateur game

Frank Warren column

Dr Wu has big plans for the professionals yet he should stick to the amateur game
Synagogue attack: Fear unites both sides of Jerusalem as minister warns restoring quiet could take 'months'

Terror unites Jerusalem after synagogue attack

Rising violence and increased police patrols have left residents of all faiths looking over their shoulders
Medecins sans Frontieres: The Ebola crisis has them in the headlines, but their work goes far beyond West Africa

'How do you carry on? You have to...'

The Ebola crisis has Medecins sans Frontieres in the headlines, but their work goes far beyond West Africa
Isis extends its deadly reach with suicide bombing in Kurdish capital

Isis extends its deadly reach with suicide bombing in Kurdish capital

Residents in what was Iraq’s safest city fear an increase in jihadist attacks, reports Patrick Cockburn
Underwater photography competition winners 2014 - in pictures

'Mysterious and inviting' shot of diver wins photography competition

Stunning image of cenote in Mexico takes top prize
Sir John Major: Negative West End portrayals of politicians put people off voting

Sir John Major hits out at theatres

Negative West End portrayals of politicians put people off voting
Kicking Barbie's butt: How the growth of 3D printing enabled me to make an army of custom-made figurines

Kicking Barbie's butt

How the growth of 3D printing enabled toy-designer to make an army of custom-made figurines