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.