Conduct the Necessary HR M&A Due Diligence

Traditionally the merger due diligence process has focused on legal and financial issues—e.g., contractual matters, litigation points, economic and fiscal considerations, etc. Obviously that’s an important exercise.

But when mergers fail, as they too frequently do, the odds are it reflects a sloppy job of soft due diligence. We coined that phrase to describe our work for clients in analyzing a number of factors critical to merger success, such as the following:

• Management strengths and weaknesses
• Organization structure and the needs/opportunities for redesign
• Salient differences in corporate culture that must be reconciled
• Organizational “soft spots” that could put the merger at risk

There is powerful logic in favor of systematically assessing the competencies of key players in the new organization. You should not automatically assume . . .