WEBVTT

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When it comes to people issues
in a carve-out, leaders usually

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think first about what we call
the deal perimeter--

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basically, who stays and who
goes.

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That seems straightforward, but
it often involves pretty complex

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considerations in areas such as
shared functions and back office

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support, particularly as we take
into account any of the buyer's

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specific needs and requests.

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That's why it's so important to
reach internal alignment quickly

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on a clear strategy for the deal
perimeter, especially since

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those decisions often have a
material impact on our stranded

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cost considerations and any
potential future cost structure

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decisions.

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While executing the deal
perimeter, it's important to

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recognize also that every
country has its own unique rules

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on issues that can impact the
workforce.

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It's vital to have a thorough
understanding of these rules

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since they can have a pretty
material impact on the deal's

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timelines and structure.

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Beyond the deal perimeter, there
are several other key issues to

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consider in a carve-out, for
example talent retention.

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When it comes to talent
retention, companies typically

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lean into monetary rewards, but
the reality is there are several

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non-monetary elements that also
play a pretty important role in

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our ability to retain and keep
key talent.

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For instance, one way we can
drive retention is how we

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communicate about the deal,
doing it in a way that provides

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clarity on the vision and
minimizes any uncertainty.

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Leaders can also reduce
uncertainty and prevent

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distractions by proactively
making some organizational

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design and operating model
decisions for the future state

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as soon as possible instead of
waiting 'til after the deal is

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complete, so we can communicate
that to the employees.

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Another way for companies to
improve retention and minimize

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attrition is to give high
potential talent a seat at the

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table or even a leadership role,
showing them the value that they

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can bring.

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Of course you can't talk about
talent without talking about how

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we communicate to our employees
during a carve-out deal,

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particularly in the early days
when you actually can't share a

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lot of information.

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Early on, pull in who you need
to, leverage NDAs.

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But also it's important to have
a clear strategy for those who

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are under the tent on how to
manage questions they might get

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and have a rapid response ready
if any potential leaks occur. As

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the deal progresses,
particularly in the period

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between sign and close, it's

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safe to assume it's better to
have too much communication than

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too little.And even when you
can't communicate specifics, you

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can manage expectations by
letting people know when they

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can expect to hear more.

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Communication alone?

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Not enough.

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This is a material effort for
the company and a rigorous

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change management program is
important.

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Make sure that you have a
structure in place for people to

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provide feedback, to ask
questions, and most importantly,

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invest time in preparing your
leaders.

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They need to be equipped to
address the questions that

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employees are likely to raise.

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Giving your leaders guidance on
what to expect can ensure that

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they also feel supported.

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It helps maintain consistent
messaging on the carve-out

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throughout the organization.

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From what we see, the most
successful carve-outs involve

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organizations that treat people
and culture issues with the same

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rigor and attention as other
aspects of the transition.

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Remember, taking good care of
your employees has a fundamental

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impact on how they will feel
about this transaction long

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after you reach day one.