Simplification II

you cannot afford to have a high-performing unit with a terrible culture infect the others. 

After the first round of simplification, it may be necessary to fragment the operating units.  This will be the case when units do not need to work in close coordination--when they are basically separable.  Such fragmentation breaks political coalitions, cuts the comfort of cross-subsidies, and exposes a larger number of smaller units to leadership's scrutiny of their operations and performance.

After this round of fragmentation, and more simplification, it is necessary to perform a triage.  Some units will be closed, some will be repaired, and some will form the nuclei of a new structure.  The triage must be based on both performance and culture--you cannot afford to have a high-performing unit with a terrible culture infect the others.  The "repair" third of the triaged units must then be put through individual transformation and renewal maneuvers.

ACTION POINT: Base simplification and triage on both performance and culture.