Got what it Takes to be a SpinCo CEO?
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April 18, 2017
Leadership StrategiesPortfolio Company LeadershipLeadershipBoard and CEO AdvisoryExecutive Search
The Chief Executive article, “Got what it Takes to be a SpinCo CEO?” featured findings from our research, The art of the healthcare spin-off: 5 leadership lessons. The article is excerpted below. 
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Chief Executive

In an age of increasingly aggressive shareholder activism, corporate spin-offs are all the rage. And that’s presenting new challenges for CEOs tasked with overseeing assets that have often been cast off by companies seeking higher returns elsewhere. 

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The justification for such deals can vary, though they’re usually predicated on the idea that the sum of a companies’ parts is greater than the whole. More often than not, though, spin-offs occur when management wants to place a greater focus on the things they do best, leaving someone else to make the most of the rest. 

And that someone faces a unique set of challenges that require special skills, according to a new study by recruitment firm Russell Reynolds based on interviews with a dozen CEOs, CHROs and investors in the healthcare sector. 

Because SpinCo CEOs are under immense pressure to hit the ground running, they typically have deep industry experience, often coming from inside the company from which they are created. Whether internal appointments or not, though, respondents said SpinCo CEOs must be resilient leaders who can handle uncertainty—and get back on the horse should things go wrong. 

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Asked what they would have done better, many of the study’s respondents said they had underestimated the importance of filling senior executive roles for three key functions: IT, finance and human resources. 

To read the full article, click here.