Don’t
worry, you haven’t stumbled onto a relationship advice column. I’m here to talk
about an old problem for organizations: how to successfully divest parts of
organizations that need to become independent entities. There’s lots of
research on how to incorporate acquired previously independent organizations
and turn them into parts of a larger organization. That’s because the problem
of incorporating acquired organizations appeals to our appetite for growth, so
it’s a sexy topic. But large organizations must deal with divestments as well
as acquisitions, and divestment research is harder to find.
A recent paper in Administrative Science Quarterly by Rene Wiedner and Saku Mantere teaches
us some new things about the separation process. They look at the separation of
one part of an organization in the English National Health Service from a
larger part, and they examine what went right, what went wrong, and why. The
findings offer very useful lessons, and some are surprising.
It would
seem logical that for others to gain independence, we should not help them too
much. Helping means communicating and giving advice, and that is exactly how
organizations (and people) stay dependent on others, right? Well, when
separating out an organization, this is exactly wrong. Regular and respectful communication
actually makes the separation easier and more successful for both the “parent” and
the “child” organization.
Wiedner and
Mantere found that communication is important because it creates two kinds of
respect: appraisal respect, which is based on recognized ability and effort,
and recognition respect, which is based on shared values. Both forms of respect
are needed for the newly separated organization to be fully autonomous, as it
needs to be to function well. Interestingly, these forms of respect don’t
require that the organization can already stand on its own at the time it
separates. Quite the opposite: they enable the organizations involved to ask
for help and give help, which leads more quickly to the divested organization experiencing
autonomy and the divesting organization granting it. Autonomy in turn creates
independence.
The message
here is that separation involves some leaps of faith because the respect has to
be given before the newly separated organization is fully autonomous and independent.
This is why separation can easily fail: if we demand that a divested organization
demonstrate its independence before we grant it autonomy and respect, we’re
doing things in exactly the wrong order.
Many parents
already know this lesson, of course, because letting children become
independent involves many leaps of faith. Before we hand them the keys, we
can’t know for sure that our teens won’t wreck the car. Before we pay the
tuition bill, we aren’t guaranteed that they’ll study hard in their college
courses. In addition to reading this new research by Wiedner and Mantere, divesting
organizations might do well to check out some parenting advice columns.
Wiedner, R., and S. Mantere
2018. "Cutting the Cord: Mutual Respect, Organizational Autonomy, and Independence in Organizational Separation Processes." Administrative Science Quarterly, forthcoming.
