The proverbial “dogs” have been closed. Businesses with marketable assets such as real estate or modern plants have been sold off. High-performing noncore businesses have gone to the highest bidders. For large corporations intent on refocusing their portfolios, a seemingly intractable problem remains: how best to dispose of basically sound but underperforming businesses that do not fit the corporation’s vision. Lacking high-quality physical assets and suffering from a chronic lack of corporate attention, noncore businesses may nevertheless have formidable brands, enviable distribution power, skilled and experienced people, and proprietary systems. Competitors would take years to develop the same intangible assets. Restructuring CEOs appreciate these sources of value, but because the businesses are not central to the corporate portfolio, the investments of time and money necessary to develop them into world-class operations cannot be justified.
A version of this article appeared in the November–December 1995 issue of Harvard Business Review.