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When to break up a conglomerate: An interview with Tyco International’s CFO
For most executives, planning for growth means thinking about getting bigger. But when Chris Coughlin took the post of CFO at previously scandal-scarred Tyco International, he and CEO Ed Breen quickly announced other plans for the $40 billion conglomerate.Arguing that the vastly different needs of each of the businesses—in everything from capital structure to investor base to the recruitment and development of executives—actually prevented each of them from growing to their full potential, Tyco undertook an 18-month long program that they recently completed to spin off two of the company’s largest businesses.In this interview, Coughlin explains the strategic thinking behind these transactions, discusses some of the challenges and rewards of the process, and ponders the limitations on really big companies.
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