Last week, General Electric (GE), Johnson & Johnson and Toshiba each announced they were splitting apart. They decided their separate parts were worth more than the sum of those parts. These are the definitions of points of inflection for these businesses. Those that do the best jobs of resetting their strategy, organization and operations all together, all at the same time will do best. Those that do the best job of establishing their new cultures will do best over time.

Let’s back up a bit before getting into the steps to success.

Spin-offs are fraught with danger and opportunity. While spin-offs have generally underperformed the market recently, the “good banks” tend to do better than the “bad banks” because they get the deadwood out of their way.

Points of Inflection, like spin-offs, are, as Andy Grove said, events “that change the way we think and act.” Shame on you if you don’t take the opportunity to accelerate through points of inflection by resetting strategy, organization and operations.

Culture is the only sustainable competitive advantage. Be deliberatively choiceful about the BRAVE elements (behaviors, relationships, attitudes, values and environment) that will make up your new culture.

 

Steps for the GE, J&J, Toshiba spin-offs and you to follow to establish your new culture:

Lay out a process to intentionally evolve the culture – (1) define the current state, (2) define the desired end state / destination, (3) lay out a roadmap for what needs to change; and be methodical, rigorous about making changes.

1) Define the current state (“Old Co” – pre-spin)

Use the BRAVE culture assessment tool (modified with different sub-dimensions so it works for your situation) to document and articulate current values and key principles the company has been operating under. There’s a picture of the tool at the end of this article and a downloadable version at www.onboardingtools.com.

This is about assessing the current reality in as non-judgmental a way as possible – looking at where you are now or where you’re coming from.

 

2) Define the desired end state / destination (“New Co – post-spin)

Then define the core of the New Co and its strategy, organization and operations. Note the choice of quadrant informs everything else – including your new culture.

Next, co-create the elements of your new, aspirational culture using the BRAVE tool below with a broad set of people from throughout the organization – engaging people top down and bottom up. Per above, these must align with the core nature of your New Co – looking at who you want to be.

Then choose the few most important elements you want to shift first. Tackle too many and you won’t have as much impact as fast as you need to. You’ll move them all there, just not all at once. True Value Hardware CEO Lyle Heidemann allowed five years to change their culture.

 

3) Lay out a roadmap for what needs to change and be methodical, rigorous about making changes.

Think through how you’re going to influence others to make these changes. Part of this goes to leadership. Driving culture is always the most important job of the CEO. They have to genuinely believe in it, care about it and communicate in everything they do and say. Be. Do. Say.

When there’s change management involved, someone other than the CEO needs to lead that effort, perhaps with the help of an outside facilitator, getting granular around process, communication and decision-making and what all need to keep doing, start doing, stop doing or do differently.

This gets to a specific set of behaviors and practices that can be “tracked” to see if you are on course over time. The leadership team, starting with CEO, should own this and hold themselves and others accountable for making it clear and concrete. Also, you should identify champions at all levels who can be the living examples of what the future culture looks like.

This is going to be a lot of work – which is part of why it’s worth it.

Click here for a list of my Forbes articles (of which this is #737) and a summary of my book on executive onboarding: The New Leader’s 100-Day Action Plan.

[caldera_form id="CF5caa7db7b764d"]
<div class="caldera-grid" id="caldera_form_1" data-cf-ver="1.9.4" data-cf-form-id="CF5caa7db7b764d"><div id="caldera_notices_1" data-spinner="https://www.primegenesis.com/wp-admin/images/spinner.gif"></div><form data-instance="1" class="CF5caa7db7b764d caldera_forms_form cfajax-trigger" method="POST" enctype="multipart/form-data" id="CF5caa7db7b764d_1" data-form-id="CF5caa7db7b764d" aria-label="corner 2019" data-target="#caldera_notices_1" data-template="#cfajax_CF5caa7db7b764d-tmpl" data-cfajax="CF5caa7db7b764d" data-load-element="_parent" data-load-class="cf_processing" data-post-disable="0" data-action="cf_process_ajax_submit" data-request="https://www.primegenesis.com/cf-api/CF5caa7db7b764d" data-hiderows="true"> <input type="hidden" id="_cf_verify_CF5caa7db7b764d" name="_cf_verify" value="25e5ded3a5" data-nonce-time="1638372848" /><input type="hidden" name="_wp_http_referer" value="/our-blog/2021/11/what-the-new-ge-jj-and-toshiba-spin-offs-must-do-to-establish-their-own-cultures/" /><div id="cf2-CF5caa7db7b764d_1"></div><input type="hidden" name="_cf_frm_id" value="CF5caa7db7b764d"> <input type="hidden" name="_cf_frm_ct" value="1"> <input type="hidden" name="cfajax" value="CF5caa7db7b764d"> <input type="hidden" name="_cf_cr_pst" value="24410"> <div class="hide" style="display:none; overflow:hidden;height:0;width:0;"> <label>Order Number</label><input type="text" name="order_number" value="" autocomplete="off"> </div><div id="CF5caa7db7b764d_1-row-1" class="row single"><div class="col-sm-12 single"><div data-field-wrapper="fld_8557353" class="form-group" id="fld_8557353_1-wrap"> <label id="fld_8557353Label" for="fld_8557353_1" class="control-label screen-reader-text sr-only">Name</label> <div class=""> <input placeholder="Name" type="text" data-field="fld_8557353" class=" form-control" id="fld_8557353_1" name="fld_8557353" value="" data-type="text" aria-labelledby="fld_8557353Label" > </div> </div> <div data-field-wrapper="fld_2734900" class="form-group" id="fld_2734900_1-wrap"> <label id="fld_2734900Label" for="fld_2734900_1" class="control-label screen-reader-text sr-only">Phone</label> <div class=""> <input placeholder="Phone" data-inputmask="'mask': '+99 99 999 9999'" type="phone" data-field="fld_2734900" class=" form-control" id="fld_2734900_1" name="fld_2734900" value="" data-type="phone" aria-labelledby="fld_2734900Label" > </div> </div> <div data-field-wrapper="fld_6243138" class="form-group" id="fld_6243138_1-wrap"> <label id="fld_6243138Label" for="fld_6243138_1" class="control-label screen-reader-text sr-only">Email</label> <div class=""> <input placeholder="Email" type="email" data-field="fld_6243138" class=" form-control" id="fld_6243138_1" name="fld_6243138" value="" data-type="email" aria-labelledby="fld_6243138Label" > </div> </div> <div data-field-wrapper="fld_9795030" class="form-group" id="fld_9795030_1-wrap"> <label id="fld_9795030Label" for="fld_9795030_1" class="control-label screen-reader-text sr-only">Message</label> <div class=""> <input placeholder="Message" type="text" data-field="fld_9795030" class=" form-control" id="fld_9795030_1" name="fld_9795030" value="" data-type="text" aria-labelledby="fld_9795030Label" > </div> </div> <div data-field-wrapper="fld_5997409" class="form-group" id="fld_5997409_1-wrap"> <div class=""> <input class="btn btn-default" type="submit" name="fld_5997409" id="fld_5997409_1" value="Send" data-field="fld_5997409" > </div> </div> <input class="button_trigger_1" type="hidden" name="fld_5997409" id="fld_5997409_1_btn" value="" data-field="fld_5997409" /> </div></div></form> </div>