It isn’t often CIOs can make like the pros and draft “players” for their IT team but in early 2015 that’s exactly the scenario Tony Bender found himself in after he agreed to help Edgewell Personal Care peel off its Energizer brand as a separate company. Bender recalls meeting with Mike Aufdembrink, who Energizer hired as its CIO in December 2014, so they could fill out each of their IT teams.
“Early in the year we sat down and had what was akin to a draft,” Bender recalls. “It was, ‘OK, I want this person and if you get this person, I want this person. We had to divide the team up and make an offer to each person.”
What made it strange was that the offers were just that — offers. Bender and Aufdemnbrink designed roles for each of their desired employees — roughly 100 for each company — and filled in boxes in their respective organizational charts. Then they made their job offers with the clear implication that they could take it or leave the available positions. ‘Here’s an opportunity, we hope you like it,’ says Bender, recalling the conversations. But the offers weren’t negotiable. “We did have some people who chose to leave … it’s hard to avoid.”
The secret to spin-offs isn’t so secret
Such decisions are inherent in corporate spin-off in which speed and efficiency are critical. Once a corporate board signs off on such a separation the clock starts ticking and the deadline creeps closer, with faulty decisions requiring rapid course corrections. Bender had 15 months to create IT departments and select staff for two complex businesses with penetration in as many as 50 global markets: Edgewell, which features brands such as Schick, Playtex and Hawaiian Tropic, and Energizer, a leading battery brand.
Bender first designed the operating budgets and organizational models for both Edgewell and Energizer’s IT departments, handing Energizer off to Aufdembrink to run. Then he began working his way through 100 IT projects, including the onerous task of detangling 400 global applications for each business. Because the businesses used several of the same IT services, Bender “cloned” anything from SharePoint instances to data center infrastructure, including servers and networks so that both companies could use them. He also copied three SAP ERP applications and shuttered some SAP, QAD and Epicor packages for each entity.
It’s customary for CIOs to seek synergies in such complex splits. Enticed by reduced license and support costs, Bender purchased several SAP applications. He chose SAP’s Hybris ecommerce application and SAP cloud applications, including SuccessFactors for human resource management, Ariba for procurement and spending analytics, and Concur for travel and expense management. “Cloud-based solutions were preferable because we could stand them up faster and implement them accordingly,” Bender says.
While Bender acknowledges the predominance of SAP in his portfolio he insists that he’s not wed to the vendor; rather, he’s picked the best solution for each business need. “You have to look in terms of adding value to the business,” Bender says. “Where it makes sense we lean into SAP and we’ve had success with that.”
Courage to bet on other vendors
SAP didn’t suit every business line. For example, Bender heard “loud and clear” from finance leaders in both entities that they wanted to use Oracle’s Demantra software for trade promotion management and Hyperion financial management and planning. Bender also outsourced payroll to Xerox and ADP, integrating both into SuccessFactors. “We’re going to work to drive business value wherever that is and not push one technology over another in order to drive the agenda through the IT lens only,” Bender says.
It can be tough serving business customers jockeying for their preferred IT products and brands. The upshot is that as cross-functional coordination ramps up during spinoffs, IT commands more attention and respect than ever. That gave Bender’s team the clout to press the business units on making technology decisions so IT could implement them on time. “Because we were all marching to a deadline our voice was louder,” Bender says. “We created a lot of attention in working with these other functions to have them make decisions so that we could keep the project on schedule,” Bender says.
Bender completed his work early in the summer of 2015 and the spin-off went live on July 1, with Edgewell worth about $2.4 billion and Energizer clocking in at $1.9 billion in revenues. The corporate divorce joined the likes of Hewlett-Packard Enterprise, R.R. Donnelley and other large organizations that split to get leaner and meaner in recent years.
The secret to Bender’s success included operating with a “speed over elegance” mindset, selecting new solutions and decoupling others to satisfy business requirements to meet the deadline. “Once you make an announcement you are at the mercy of the date,” Bender says. “So it’s keep it simple and don’t look for major process transformation.”
As for the people who were offered jobs on a take-it-or-leave-it basis, Bender says he was happy with those who joined their respective companies. “It actually went remarkably smoothly.”