Unlocking impact and growth at times of demerger

Pharma and medtech companies have undergone unprecedented growth through aggressive M&A over the last decade, with average deal sizes increasing by 77% in 2023. Portfolio expansion can certainly be lucrative, but it also has its drawbacks. Buying up and absorbing businesses can create a clash of cultures and organisational inefficiencies.

Faced with complex portfolios and complicated structures, many businesses are choosing to de-merge to refocus efforts and take control of their futures. Look no further than GlaxoSmithKline shedding its consumer health arm to form Haleon, the world’s biggest standalone company in its field.

A demerger, like any restructure, is a major pivot for any business. Fail to get stakeholder buy-in around the new vision and it can put a damper on future growth, leaving the company vulnerable to rising competition. Executed well, however, it’s an opportunity to clarify the offer and pull together in one direction to realise commercial ambitions and secure future profitability.

Here’s how to align purpose, brand, and culture to consistently communicate value and build credibility at this pivotal moment.

Build a leadership vision

At pivotal moments, it’s imperative to go to market with a clear strategy and defined message to articulate what you stand for and the value you deliver. This offers concrete reassurance to stakeholders, keeping investors, shareholders, and talent on board.

A robust corporate brand with a transparent and tangible purpose is the way to do this. High-purpose brands double their market value more than four times faster than low-purpose brands, and deliver far higher returns for shareholders, research finds.

Building the new vision starts with defining a credible and meaningful purpose, the ‘why’ any business exists. Change trickles from the top down, so it’s important that the senior leadership team is fully aligned on the new business purpose and ambition to steer the ship. This will bring clarity to decision making, influence culture, and motivate people to deliver against the new vision.

Telling the newly formed business’ story through a single, clear, compelling narrative will help it resonate with all the audiences it needs to reach. Leadership and management should speak a single language that everybody from the marketing department to the factory floor can understand, with a consistent message. Think strategy on a page; communications on a page, crafting no more than three to four points you want to get across.

Drive growth through brand

As the lens through which a business communicates with all its stakeholders, brand is its most important strategic asset at high-stakes, high-value moments. The story you tell, visual identity you create, and a new name and positioning all go a long way to inject the energy and passion needed to drive the new entity forwards.

But this is about more than just logo, font, or colour palette: brand represents everything a business says and does, and people have higher expectations than ever when interacting with brands today. Offering a clear, coherent experience at times of change helps build relationships and lends a competitive advantage.

This is where clarity of vision and purpose counts. The newly defined vision should be reflected in every outward expression of the brand and verbal identity. From the logo and taglines to headshots and product renders, every touchpoint is an opportunity to reflect the unique purpose, ambition, and personality of a reinvigorated brand.

Mobilise people

Culture is the bedrock of business performance, yet, at times of major strategic change when resilience is more critical than ever, there are always consequences for engagement and productivity.

Time and again, it’s been shown that traditional approaches to change management fail. People need to feel part of the change to unlock the paralysis that’s typical at pivotal moments. And with talent shortage already a challenge in healthcare and pharma, it’s also important to align and integrate culture to mitigate any flight risk when undergoing change.

To get a full representation of what lives within the organisation before delivering any culture change programmes, gather input from a mix of geographies, different functions, and areas of expertise.

The more clarity you can give in that crucial first 12-month period, the better. The goal of any communication is to convey ideas simply and clearly. Nowhere is this more important than in pharma and healthcare, where scientific jargon, data points, and complexity can muddy the original, core reason most people join these industries: to help people.

Mobilising people around what really matters to them – often buried in a siloed corporate purpose – can serve as a guiding force to improve productivity, engagement and ultimately, business outcomes.

In conclusion, a demerger, like any major pivot, is a high-stakes, high-value moment where everything matters. Reconnect to their business purpose now with clarity and focus, and organisations can hit a definitive reset that unlocks future impact.