Your strongest Asset during a Carve-Out is the Carve-Out Mgmt. Office

Before setting up the leadership and governance structure, the objectives of the carve-out management office shall be set. Define the goals of the carve-out project itself in accordance with the M&A team that led the deal process. As a first step to set up a carve-out management office, you want to establish a governance structure with a clear reporting hierarchy and decision-making process. Start from the top and define the responsibilities of the carve-out management office lead with respect to the M&A department(s) and other organizational units, e.g. corporate development teams, in the company. Determine who will be responsible for making key decisions and how they will be made. Nominate a leader with demonstrated experience in managing complex projects, change management, and leadership in a fast-paced environment. In the next step, identify committees or teams that will be involved in the governance structure, such as a steering committee that help to guide the team, take critical decisions, and foster buy-in across stakeholder groups. Tip: Work with a RACI chart to gain full transparency about who is responsible for what. 

Set up a team structure for the carve-out management office and define their responsibilities. The ideal team structure is closely aligned with the needs and overall objectives of the management office. 

• Lead: As outlined before, it is recommended to install one person that is leading the carve-out management office with full accountability.
• Core Team: Depending on the size of the deal and complexity of the carve-out, it is recommended to set up a core team with a minimum Headcount of two that supports the lead with everything concerning planning, reporting, communication and finding solutions to problems that come up. 
• Baselining team:  Set up a separate team that takes care of collecting data and information during the Baseline phase. This team’s job is to ensure a clean and complete data set that reflects the status quo of the business entity in scope of the carve-out.
• Central Workstream Leads: The central workstream leads are responsible for the operational carve-out of one respective function. For every business function or dedicated area, you want to nominate a workstream lead. Workstream leads have the utmost expertise in their field and have worked multiple years in that area. A carve-out project can contain 20 or more different workstreams and workstream leads such as: Finance, HR, Sales, IT, Operations, Procurement, Marketing, IP & Licenses, SLA’s/TSA’s, Real Estate and more. Usually, every central workstream lead will build up a team that supports him/her with the carve-out. 
• Country Leads: Nominate a country lead for every country in scope of the carve-out. The role of the country lead is to be the single point of contact to the business in the country. The country lead is also responsible to break down the plan into sub-tasks that can be executed locally, respecting local requirements and regulations.
• Local Workstream Leads: For every central workstream, a local counterpart is needed to execute the carve-out of the specific function in the country. Nominate local experts that have experience in the respective field. Please note that setting up local workstream leads is not necessary if the respective function is not present in that country. Example: If one country has a sales entity only, many workstreams will be redundant for that country. 

Finally, it is crucial to incorporate all different teams with their roles and responsibilities in your project management and planning tool. Different team members require different views and access rights on different data sets. Orchestrating the administration is the key to a digital carve-out management office. 

The carve-out project plan as well as every sub-task that has been created by central workstream leads, country leads or local workstream leads needs to be in one place. All information needs to be easily accessible by everyone that needs to access it, anytime and anywhere. It is recommended to store historical versions of everything and to offer an audit trail. Knowing those requirements, you will quickly notice, that spreadsheets and slides will not be sufficient. You need a fully equipped M&A tool that is built for this exact purpose. 

Establish performance metrics to track progress and measure success. This includes metrics such as project milestones and status reports that allow the team to identify and flag problems as quickly as possible. It is important that the different activities in your project plan are connected to each other to identify the critical path in the carve-out. It is recommended to have a status reporting in place on all levels, i.e. from local activities up to the central carve-out plan. Tip: Keep the terminology for the status reporting simple and straightforward, many teams work with traffic lights (red, yellow, green) that help them to spot risks across functional and regional topics quickly. Assign responsibility in the central team for the complete reporting processes and tools to make sure you do not get lost in delegation. 

By following these steps, you can set up an effective and efficient carve-out management office. It is important to set up an experienced team that has enough experience to deal with a complex project and solve new challenges, which will come up every week. Also, it is highly recommended to set up all information and processes digitally from the ground up. You need a reliable system that helps to store, manage, analyze and report all information that the carve-out management office needs. The better your processes and system, the better and efficient your carve-out management office and team.