How 3M Spun Off Its Healthcare Business

In July 2022, 3M announced its intention to spin off its $8.61 billion healthcare business group to act as a standalone diversified healthcare technology business. 3M will retain a 19.9 percent stake in the new business with hopes of the divestiture being completed by the end of 2023.

For Deidre Rehfeld, 3M’s vice president of global benefits and HR vendor strategy, the deal has been an all-hands-on-deck project since well before the announcement came. The divestiture is unique in a multitude of ways that have brought interesting challenges for the labor and employment specialist, who has received five promotions over her twenty years in-house at 3M.

A Standalone Success from Day One

“Unlike other divestitures where you’re selling an operation to an already established organization, there simply isn’t one here,” Rehfeld says. “Those organizations have their employee benefits programs and systems, their contracts and essential partners, and their staff in place.

“This is something else entirely,” she says. “We’re building those plans, structures, and staff using what we know has worked, while tweaking efficiencies and other processes where appropriate. Because this organization is being built to hit the ground running on day one.”

In short, this is no “Little Engine That Could” start-up scenario with a tiny group of employees who hope to make good. This is a multibillion-dollar business group with a proven track record of economic success and thousands of employees. But it’s also one that needs to draw from both the best-in-class practices from 3M while also balancing a culture creation and approach that can be uniquely its own.

These are good challenges to have but challenges nonetheless.

From an employee experience perspective, the VP says the transition needs to be as smooth as possible. Her team is working with trusted partners to understand the differences between 3M and its spin-off to remain true to what made the business successful in the first place, and still be in prime position to continue that growth on its own.

Rehfeld says it’s a delicate balance of injecting 3M practices with the knowledge that the healthcare business group will undoubtedly grow and develop into itself over time. In many ways, it’s like transferring a plant seedling into a new pot to help the business take root and provide the necessary room to branch out on its own.

“Ultimately, the business will have to decide what’s right for it in the future, but right now it’s about maintaining those consistencies, which have made the business group successful, and avoiding that natural tendency to tweak and change endlessly,” Rehfeld says. “You set them up for success and know you’ve done everything you can to help them succeed.”

Autonomy, Curiosity, and Making Family a Priority

The same can be said of Rehfeld’s practice and counsel. As a people leader, Rehfeld says she works hard to ensure that her people feel supported and empowered. The lawyer didn’t professionally grow up in employee benefits, and she knows what it means to grow into new areas of expertise.

The VP says she’s benefited from inheriting an incredible team, one that has taught her a lot and one she works hard to counsel without feeling micromanaged.

“I don’t expect to be consulted for every decision,” Rehfeld says. “I think there was a period of learning where my team had to let go of some of that conditioning to get sign-off for every kind of decision. I’ve tried to move us away from that. I’m always open to a conversation about direction, but I want them to know that I trust their judgment.”

Just as Rehfeld has learned from her own team, the lawyer’s early law experience can serve up many lessons for those just beginning their law careers. First and foremost: keep an open mind and be willing to take a risk.

Rehfeld worked as a research assistant during law school, a suggestion that came from one of her professors.

“The professor was an expert in law I never even considered practicing, but I figured, why not give it a shot?” she says. “It was one of the most uniquely interesting experiences I think a law student could have. My mentor was incredible, and I learned so much about stretching yourself and giving an experience a chance.”

And while professional growth is always on her mind, Rehfeld says she works hard to model the importance of work-life balance for her team. The lawyer’s dedication to her family was put front and center from the lawyer’s first day at 3M, and she wants her team to feel the same.

“My husband and two sons are the absolute light of my life,” Rehfeld says. “We work hard here. But I believe, and I hope my team also believes, that our families are given the highest priority. I’ve had the good fortune to work for people who believe that, and I want to model that behavior for others.”