Spinning Off a Business
Without Getting Dizzy
By Deepak Nagabhushana, Maren Baetje-Mbaye, and Hartmut von Berg
In today’s globalized business world, international expansion is rising and mergers, acquisitions (M&A), and spin-offs are becoming increasingly common. While each scenario and company are unique, many of the challenges of building a new business are somewhat universal. However, localization and globalization functions tend to face unique challenges due to their unique position within an organization. In this article, we will highlight some of the key challenges in creating a localization function within a spin-off, ways to overcome them, and lessons learned for future M&A and spin-off events.
When planning and preparing for the spin-off, the parent company, or OldCo, has to make some fundamental decisions. Before starting the project management of the spin-off and localization ramp up, we had to answer the question: internal or external resources?
Is it better to have an internal project manager lead the spin-off and ramp-up or to hire an external consultant? Should we have part of the existing team migrate to the new company, or NewCo? Is embarking on a recruitment and enablement program the better option? In our experience, we understood quickly that whatever path we would take, we needed to build a solid project management foundation due to the complexity and timeline of the project.
The first lesson we learned was that we should have moved faster. When we heard about the spin-off, planning had been underway for some time, and budgets and headcounts were nearly finalized. Also, we erroneously assumed that we had built up a good standing within our OldCo — but our function was positioned in a “blind spot” of the company and was forgotten and difficult to bring back in a form that would be best for the NewCo. This is why building good relationships with the overarching spin-off program management to claim our seat at the table whenever needed was key to success. Our main challenges and most painful lesson? Being late to the game can lead to a lack of budget, limitations in subscribing to the optimal tech stack, and hiring the optimal number of people.
Ultimately, what helped us keep track and stay focused were clearly defined responsibilities so we could hold each other accountable and agree on project principles: no customer impact, keep the lights on (KTLO) as an essential minimum, and handover as is to be mindful of resources and time constraints if the existing model is worth keeping.
Home, sweet home: finding the right position in the org
Have you ever been in a situation where you needed to find a new home for your role or function within an organization? Based on our experience, several aspects can drive the selection of a position in the new organization. The ideal option combines as many of them as possible so that localization can add the most value and get the best support:
- Align with and inform corporate globalization strategy (location: international operations or corporate strategy)
- Support ongoing go-to-market initiatives (location: international sales or marketing organization)
- Follow the money to secure funding for your globalization efforts
- Join forces with product development to internationalize the product and really kick it off globally (location: UX or product development organization)
- Get support to establish new processes and integration initiatives to boost automation and efficiency (e.g., kick-off full localization of digital support with CMS integration and MT) (location: Care organization)
The challenges we faced included establishing ownership and securing sponsors for NewCo. The primary focus of NewCo’s activities was on KTLO and function-building, which then may result in the formation of silos and silo thinking that hinder progress and fostering connections.
The quest for success: enabling the new localization management and leaders
We hoped we could rely on experienced localization staff in NewCo, and all we needed to worry about was appropriate information sharing and good handover plans. However, it turned out we had to deal with many new stakeholders, including new localization management who were new to the work.
The new leaders were also hybrid managers who had little to no globalization experience, time, and capacity to catch up alongside their primary occupation. So what could we do to help? What we should have done more of, in hindsight, was arm them with business case templates and case studies while sharing knowledge and best practices. But, above all: Take on the liaison role and help them with stakeholder engagement so they can play their “spider in the web” role as a cross-functional relationship builder for the global good of the company. This is where OldCo fell short, and NewCo struggled with the consequences for quite some time.
Seeing that NewCo had to rely on hybrid managers leading localization, we aimed to make sure they hired the right team to support them and be able to scale quickly. We sought to aim high, as we wanted to maintain globalization maturity as much as possible (already knowing it would decline anyway). It turned out they chose to act cautiously and start small, and we solved the resource challenge by bringing in our preferred language service partner and borrowing a project manager and a localization engineer from them.
Our key takeaway? Above all, be prepared to move from a planning and execution role to a consulting role and push accountability to the NewCo managers as soon as possible. It’s comfortable to keep the experts in charge, but it’s easier to empower the new leadership and execute the impeding cut-off if NewCo leaders have accepted ownership as early as possible.
Who else can help? Real lifesavers when scaling quickly are preferred localization service partners, consultants, or other third-party service providers.
The consolidation challenge
The business asked us to consolidate vendors and technologies where possible. Sound familiar? However, we knew that caution was important during this delicate process, so we avoided migrating to entirely new tools or vendors and opted for calculated risks to ensure minimal disruption to our customers. We felt like we were changing the engine while driving anyway during the entire process of spinning off.
Your new stakeholders and their tech stack
Our stakeholders also had to change their tech stack and processes and/or change existing processes or replace technology to eliminate waste. We quickly understood the need to adapt our tech stack to align with their stakeholders’ changing technologies and processes. This can happen all at once or incrementally, team by team, forcing everyone to continue working in different old and new environments. If possible, keep the old environment accessible for as long as possible to avoid disruption and negative customer impact.
How did we effectively navigate through these changes and new requirements? Conducting retrospectives with stakeholders, vendors, and the project team has proven immensely beneficial throughout the process. This approach facilitates learning, adaptation, and risk mitigation. After all, it’s a project that requires constant risk and change management.
Establishing NewCo localization as a central team
What happened after the official separation of the two entities? As with most new teams in a fast-evolving environment, the NewCo localization function faces the challenge of regaining its footing and establishing itself as a central team within the new company. Based on experience, here is what can help do this quickly.
To stay afloat, it is critical to delegate and make room for strategic initiatives. This includes solidifying processes to become more hands-off and help focus on strategy and tactics.
Having a vision and mission pitch ready and articulating how localization contributes to or drives departmental and corporate goals to prove the value proposition of the localization function will open up a much better negotiating position.
A project management mindset (including ownership of results) for strategic long-term planning, while being agile and adaptable, will get the team closer and faster to the right results.
Strengthening the position of localization and building the necessary sphere of influence
Strengthening the bond with (hybrid) localization managers and turning them into enthusiastic localization allies will be critical to the team’s success. The direct reporting line will usually provide the strongest support. If not, it is important to identify sponsors in other parts of the organization, find out who is aware and knowledgeable about localization, and who would benefit most from immediate business support.
Regular contact and engagement with industry peers and, where permissible and legal, with localization counterparts at OldCo, and keeping channels of communication open for as long as possible, will facilitate many efforts. In addition, on a more focused level, finding a mentor and/or coach to help prioritize and maintain focus may be worth considering as progress is made.
Engaging with stakeholders and promoting value propositions
Aligning with stakeholders’ goals and holding them accountable for pursuing the right business objectives can be challenging. It may be necessary to persist in inviting team members to meetings if there is a lot of pushback at first. Furthermore, to position the team as a business enabler and catalyst for growth, they may need to become data-driven experts (or become best friends with the data science team).
To empower stakeholders to support localization and develop a global-first mindset, it can help to identify localization champions in each of the teams that localization works with, for example, to drive internationalization, help improve end-to-end processes, or optimize source content for localization. It’s important to help them understand and demonstrate the relevance of localization to their work and goals.
What else can a new team do to increase the visibility of your function internally and externally?
Shadowing stakeholders to understand the end-to-end process and show that the team cares about their contribution to the greater good of the company will help convince them of the common goals.
Organizing globalization summits to introduce newcomers to localization and globalization is another idea. And, if stakeholder teams are distributed around the world, investing in a roadshow and regularly inviting them to virtual kickoffs of projects and initiatives will put the team’s contributions in the spotlight. Other effective offline visibility measures include providing access to information through a briefing or information pack, website, wiki, or newsletter, and ideally, getting space in the department newsletter to extend the team’s reach. Face-to-face training on globalization and localization or, if available and more efficient, a training course that can be taken in your company’s learning management system will increase the company’s overall globalization knowledge.
What else can newly formed localization teams try?
Presenting at all-hands meetings, hosting brown bag sessions, contributing to lunch-and-learn events, and investing in cross-functional team building to align on purpose, goals, and development areas in the overall stakeholder relationship or for a specific cross-functional project are just some of the options. Employing a scrum master or agile coach and using a cross-functional team canvas and working agreements can boost collaboration.
Most importantly, showcase and celebrate successes and recognize colleagues’ and stakeholders’ contributions. Let them shine and claim their own merit in working with the localization team builds trust and motivation.
Attending conferences, being inspired by the experiences of others, and sharing your successes with industry peers can open the door to helpful insights and solutions.
As the team grows:
To empower the new team, retrospectives, daily stand-up meetings, weekly team meetings, one-on-ones, and on-site (or off-site) workshops and team-building activities are some measures to pursue.
Despite — or because of — the expertise needed within the team as it grows, it may be worth considering a T-shaped skill set, both broad in operations/production-related responsibilities and deep in a specific area of expertise to remain flexible and build a team training matrix and backup plans. This will help prepare for succession planning. Ideally, there will be room for job crafting and the pursuit of team members’ natural interests and challenges as they try to keep pace with developments within the organization and the rapidly evolving external environment.
Creating a successful localization function during an M&A requires careful planning, effective project management, and building strong stakeholder relationships. By addressing the challenges and implementing the recommended actions outlined in this article, both OldCo and NewCo can navigate the complexities of spin-offs and establish a thriving localization function within the new company.
Deepak Nagabhushana is a localization project manager for GoTo and has worked in localization since 2004. He manages localization programs, tech stack initiatives, M&A, and spin-off projects.
Maren Baetje-Mbaye holds a master’s degree in business psychology, is a staff localization project manager for GoTo managing M&A and spin-offs, and has worked in localization since 2008. She promotes a global-first mindset and workable practices in organizational development.
Hartmut von Berg is senior director of localization at GoTo, serving as the site leader in Karlsruhe, Germany. Over the past three years, he transformed the GoTo’s localization from a translation service into a globalization consultancy.
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