Issue Organizations hesitate to divest even when they are no longer the best owner

Summary

McKinsey highlights a quieter barrier to focusing on the core, namely reluctance to let go of businesses that no longer fit. Many organizations shy away from spin-offs, split-offs, carve-outs, and outright sales even when another owner could run a unit better. The report attributes this hesitation to worries about valuation, uncertainty over when to separate, sunk costs already tied up in the assets, and fear that a separation could hurt the rest of the company. Big moves of this kind can feel daunting, so noncore activities linger and absorb capacity. The recommended remedy is governance that regularly asks whether the company is still the best owner and frees resources for priorities through decisive divestment.