Major Divestiture Amplifies Need for Project Management Governance
Last year, Johnson Controls announced its intention to spin off its automotive division, the global leader in automotive seating. For decades, Johnson Controls’ IT team strived to converge systems and consolidate contracts between business units to save costs. Now we were being asked to unravel these synergies in less than a year. Failure was not an option. The date for separating the two companies could not “slip.” The IT leadership team knew it had to employ excellent project management governance in order to achieve the divestiture goals.
How did we do it? What follows might seem like project management “basics” that we have all known for years, but it is the discipline and degree of execution that the Adient IT team brought to the table that made all the difference.
1. Seek expertise: Early in the divestiture process, we aligned with colleagues who had recently gone through a similar project. It’s always better to learn from the mistakes of others than from your own. Consulting companies can also provide assistance. A wise selection considers not only the company’s expertise, but also cultural fit. On intense projects, you will be spending a lot of time with them, so you may as well like them!
Divestitures will definitely highlight the accuracy of your asset management database including contracts, hardware, and software licensing
2. Have a strategy: Set up guiding principles that help direct decisions. A key for Adient was “speed over elegance”. Time did not allow for any transformational projects. Sure, it would have been great to re-do some business processes or implement new applications, but that was not feasible. Stand strong, don’t allow scope creep! For most applications, we used “clone and go.” This simple principle really helped to rally and guide team members.
3. Leverage the steering committee: Our leadership team was most concerned with IT projects being delivered on time. Don’t let that sour you; use it to your advantage. Wear “red status” as a badge of courage and ask for assistance when needed.
4. Drive metrics-based reporting: It’s not enough to show status as red, yellow, or green. In most cases, that is a judgement call, based on a person’s natural bias. Report progress using easy-to-understand metrics such as percent of systems converted or percent of sites that have been migrated.
5. Manage the “unrealistic” schedule: Time is critical. Figure out fast paths for approvals and bringing on resources. Align key dates and milestones, and let the different teams work out their own detailed tasks. The tendency will be to backload the schedule, to maximize delivery time, and minimize dual environments and support. Be careful of this. Pace the work and leave time at the end for unknowns.
6. Build the team: The project team needs privilege of focus, don’t have them doing two jobs. Build your new team for the divested company quickly to catch and support new systems. Take time for team building to ensure everyone is aligned. Reward and recognize employees for their accomplishments.
7. Communicate, Communicate, Communicate: Make sure to have a good communications plan. For IT, we used frequent “stand-up” meetings to expedite status meetings and to work through issues and risks. For end-users, exercise good organizational change management to help them understand and cope with all the changes.
8. Engage procurement: Splitting apart systems and contracts creates financial dis-synergies. Rely on your purchasing staff to negotiate new deals with suppliers to minimize increases in ongoing licensing and maintenance costs. Divestitures will definitely highlight the accuracy of your asset management database including contracts, hardware, and software licensing. If it’s not in good shape at the beginning, it will be by the end!
Adient successfully spun off and became an independent company on October 31, 2016. The key after surviving an intense project, like this divestiture, is to not let good discipline end with the project. Ask how these principles can be better applied to all IT projects in the new company. Don’t fall back into the old routines and habits.
In the end, keep in mind the famous words of Yoda from Star Wars: “Do or do not. There is no try”.