How to Perform Culture M&A Due Diligence

41-slide PowerPoint Presentation

How to Perform Culture M&A Due Diligence

1. Understand the Deal Logic
2. Get Organized
3. Gather Data
4. Analyze the Data
5. Operationalizing the Data

Critical Mistakes in Culture Integration

1. Extremely under-funded
2. Attacking on too broad a front
3. Mismanagement of expectations
4. No coherent methodology
5. Delegated to the wrong people
6. Allowing the existing culture(s) to call the shots on culture change
7. Confusing culture issues with the generic problems of change
8. Lack of focus on operating results
9. Failure to train the workforce
10. A reward system that reinforces the status quo
11. Misconstruing the signs of progress
12. Lack of backbone and commitment

The Process of Culture Due Diligence

• STAGE 1: Understand the Deal Logic
• STAGE 2: Get Organized
• STAGE 3: Gather Data
• STAGE 4: Analyze & Synthesize Data
• STAGE 5: Operationalize the Results

STAGE 1: Understand the Deal Logic

1. The Business Case
2. Value drivers
3. Integration intent
4. Perceived risk factors

The Business Case

• Competitive market advantage
• Synergy targets
• Geographic expansion / international
• Vertical integration
• Product/service diversification and cross-selling
• Financial targets
• Timeline ...