How to Start a Division in a Corporation

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Most companies start small, with a devoted team that takes on a variety of tasks and duties as they arise. As a venture takes off, companies inevitably add staff and delineate roles to help the business run more smoothly, and you eventually end up with departments or divisions within an organization. Sometimes, however, established corporations see a need to add a new division to its ranks -- such as a learning and development division or research and development department.

Identify the Business Need

All work in an organization almost always ties into a business need, and the same applies to a new division. Start by looking at the goals and objectives of the company as they relate to this division. Diagnose the business problem this division will attempt to solve. If a particular problem doesn't exist, classify the opportunities for improvement relative to the division. For example, improving the on-boarding process for new hires could benefit from an L&D division. Once you identify the goals, objectives, problems and opportunities, define the desired outcome. In other words, understand the benefits associated with starting a new division.

Collect and Analyze the Data

Research other companies that established new divisions and compile the results. If you’re starting an L&D division, focus only on those that did the same. Then determine how these new divisions affected the efficiency, performance, quality, sales, satisfaction, participation and even retention rate at these companies. From there, poll your staff to get their feelings about the initiative. Ask what they expect of this division and whether they see the need or potential benefit. Ask how they think the division will affect their work.

Develop a Business Plan

Although your company has a business plan, the new division will need one as well. Describe in detail what services or products will fall under this division’s control. Explain how the division — or its employees — will perform these services or develop these products. Justify staffing needs and determine the necessary qualifications for new hires. You may also need to define space, inventory and equipment requirements for this division.

Establish Strategic Partnerships

Nothing can derail the development process faster than a lack of support. Seek out the main influencers in your organization, particularly those in high-level positions, and establish strategic partnerships with them. Offer hard data to support the benefits of a new division. Schedule brainstorming sessions with these influencers and encourage them to share their input. You want them just as committed as you are to seeing the new division get off the ground.

Determine a System of Measurement

A division’s success is directly linked to results, and the only way to determine results is by creating a system of measurement. If you already know the desired outcome, establishing a system of measurement is a lot easier, as you understand the expectations of the division from the start. If, for example, the division intends to improve productivity, you can track its progress by monitoring the cost per unit or time spent on tasks. Software can help you do this.

Consider the Legal Requirements

If the division is to operate as a separate entity, you’ll want to register its name and apply for city, county and state business licenses. The legal counsel for your company can help with this.