By Patrick Heinemann

Carve-outs are on the rise, bringing competitive advantages like the focus on company’s core business, a response to cost pressures, realizing additional value, or increased agility. However, the high returns come with a high threat to the parent company as well as the newly created entity. What is crucial to a successful carve-out is not just having a great concept, but also ensuring a development of a strategic communications plan that is executed at all stages of the project.

What are the main challenges in carve-out communications?

1. Managing stakeholders
   All parties involved – capital market, investors, media representatives, as well as customers, suppliers, and business partners – need a positive perception of the carve-out. This can only be achieved when multiple departments of the company have a central leadership, align, and closely cooperate.
   
2. Lack of experience
   Carve-outs are not something every company will have a broad experience with, therefore, a timely preparation that considers structural and internal capacities, external support or the right staff is crucial.
   
3. Stakeholder insecurities
   Apprehension and fear of change must be managed carefully and without overpromises.
   
4. Organizational challenges
   The company needs to address the political elements, internal interdependencies, and prepare the right structures and channels.

Framework for successful carve-out communications

At Roland Berger, we developed a proven framework that supports the planning and execution of any carve-out communications project. It focuses on two factors:

1. Analysis of the main drivers of communications strategy
   Business set-up, organizational structure, transactional set-up, and stakeholder environment must be thoroughly analyzed. Each must be considered, while additionally reviewing issues like to whom the company communicates, the details to convey, as well as the content, media, and posting schedules.
2. A well-planned execution of the communication campaign
   After a thorough analysis of the main drivers, the execution should start with considering the project as consisting of different phases – preparation, concept, and implementation – and setting the objectives and tasks separately for each phase.

The Big Four: The main drivers of communications strategy

1. Business set-up
   The business model of the company planning the carve-out directly influences the target groups that need to be involved in the project. A B2B company will focus on communicating with its business partners and suppliers.
2. Organizational structure
   The company’s organizational structure is one of the main determinants of the project’s complexity.
3. Transactional set-up The core parameters of the transaction also play a key role in defining the communications strategy. For example, the separation of a single department, such as an IT carve-out, naturally limits the scope of the transaction, including the number of stakeholders.
4. Stakeholder environment
   A thorough stakeholder analysis provides the basis for any communications measures, even more so in a special situation such as a carve-out. It will determine several strategic factors.