Sellers may not have the experience or the resources available to provide the management and advice necessary to conclude a sale successfully. Therefore sellers should consider enlisting independent and experienced advisors to provide support before, during, and after the sale.
This play helps define upfront the external resources needed to conclude the sale and separation of the target business.
Before running this play it’s recommended that an organizational readiness assessment is conducted first. This will help highlight the gaps current capabilities.
Executive sponsor, separation manager and deal team
Meeting Agenda, Whiteboard, Strategy documents, & Resource Plan
Spend one day or more to prepare materials for a two hour play.
Resources are people, equipment, place, money, or anything else that’s needed to run the deal. Resource requirements are dependent on organizational readiness, divestment approach, governance and the sale process that will be followed.
The resource plan should reflect the key phases, streams of work and anticipated timeline for the transaction.
Working with the executive sponsor for the divestment, the separation manager should begin to assign internal resources taking note of their availability, their level of participation (from 10% to full-time) and skills level. Take into account holidays, long service leave, and most importantly, the ‘Business as Usual’ (BAU) activities that must be performed. BAU activities can easily take from 20-80% of a person’s availability. So it’s important not to overstretch staff as this can be counterproductive.
This process should highlight gaps in skills, resource availability and capabilities. Unless the seller is a serial acquirer, there is a strong likelihood that specialist and advisory support will be required, particularly in corporate advisory, legal and accounting. Moreover, external specialists have deep subject matter expertise and years of experience organisations will find hard to replicate.
These gaps should be identified, budgeted and, where possible, booked in advance.
For example, consider the following services:
Note that these specialists may also be referred to as Investment Bankers.
Although less common, outside specialists may also be required in the following areas:
Additional IT support may be needed in the following areas:
Potential Advisor services across the sale cycle.
Confirm the gaps and resources required.
Having a resource plan is critical to optimizing people, materials, and budget efficiency. It allows a better understanding of future resource requirements and where possible constraints, unforeseen costs, and potential risks may arise.
Before any divestiture, management needs to get an upfront assessment of their current resources. An organizational readiness assessment is a formal analysis and measurement of the seller’s ability to undertake such a major initiative.