Developing Guiding Principles

Explore our template to help decision-making. Create the desired behaviors and improve business performance. Development of guiding principles made easy.

Play by

Toby Tester

Senior Consultant & Project Manager at BTD

About the play

Developing guiding principles is one of the most important pieces of work done by the parent company when divesting a business. Guiding principles are used to help drive decision-making, create the desired behaviors, and ultimately drives business performance.

This play is focused on developing guiding principles - a set of beliefs, precepts, values and maxims; short, sharp strategic statements that indicate the course of the divestiture and its intended goals.

Note: this play will certainly need to be run more than once with each of the major stakeholder groups.

Preparation

People

CEO, Separation manager, Deal manager, Commercial team

Difficulty

Hard

Materials

Meeting Agenda, Whiteboard, Strategy documents

Time

The facilitator will need to spend one day or more to prepare materials for a one hour play.

Running the Play:

Develop key statements that communicate the divestiture strategy

Review the overall divestiture and develop responses to the following:

Overall vision and goals and ‘why’ this is so important.
Guidance on likely operational challenges
The phasing of work during the sale period
The priority of this divestiture over other business initiatives.
The desired sales premium sought for the target.
Speed of sale
Types of buyers and their motivation
Primary sources of divestiture value that buyers would be interested in
Likely pool of potential buyers

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Develop principles that guide and empower the team

The level of commitment sought from staff and executives
The kind of governance required to keep the divestiture on track
How people within the target feel like they’re part of the team
Accountability sought from executives and team leaders

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Develop key statements that frames the approach to Deal Management

Primary sources of value that buyers would be interested in.
Sales narrative and stories for potential buyers.
The type of buyer most likely to purchase.
The pool of potential buyers who are likely to pay a premium.

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Define the direction staff need to take when separating the business

Degree of carve-out expected without knowing who the buyer is.
Day 1 Operating Model

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Summarize the guiding principles for dissemination

These guiding principles are critical to ensuring everyone involved in the exercise is clear and agrees on the why and the how of the deal process, to help steer the what of individual process steps and activities. With the team in the room..

Create the rules. Write the rules up on a whiteboard. Remember: Don't have too many; Make them specific to the situation; Make them short, simple and clear; Don't need to call them 'rules'. Call them guiding principles, codes of conduct, protocols or "dos and dont's".
Test the rules. Is there any way they can be misinterpreted?; are they simple?; empowering? Do they convey meaning? Check with others and see if they can find holes, then improve upon them.

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