M&A Cultural Due Diligence | M&A Culture Due Diligence

M&A culture due diligence is an exercise that identifies the cultural differences between the acquirer and seller in mission-critical areas such as communication, decision making, and performance management.

Culture seems to appear at the top of everyone's frustration list when talking about M&A. When mergers fail, the most frequently cited cause is cultural conflict. Nonetheless, few companies invest much time, if any time at all, in cultural due diligence. Often culture seems too fuzzy and soft. It does not have the clarity of financial analysis and other types of due diligence so many executives don't bother with it. Or they simply assess culture based on their impressions of the executives they are working with when negotiating the deal. Before close, at a minimum acquirers should identify where they converge or diverge with the target company on operating philosophies and performance management.

How to Perform M&A Cultural Due Diligence

How to Perform Culture Due Diligence

42-slide PowerPoint presentation on how to perform M&A culture due diligence.

How to Perform Culture M&A Due Diligence: The 5 Stages

Understanding the Deal Logic
Getting Organized
Data Gathering Tools and Techniques
Analyzing the Data
Operationalizing the Data

M&A Culture Due Diligence Assessments

Cultural Due Diligence Assessment

15 culture assessment questions to identify strengths, weaknesses, and wild cards.

How do people feel about being merged/acquired?
What would be your (or others’) major concerns about being acquired or merged?
What are the defining characteristics of your company? (What’s distinctive? What differentiates you from other organizations in general? From the competition?)
Describe the company’s core values. (What does it believe in?)
What do outsiders not know/realize about this company?
What are its idiosyncrasies?
What are the unwritten rules around here? ...

Corporate Culture Insight Data Sweep

A disciplined process for gathering general corporate information that can serve as a fact-related window into the culture.

M&A Due Diligence Culture Assessment Results

M&A Due Diligence Cultural Assessment Results

Human Resources (HR)

Observations/Conclusions from the Data

HR operates with minimal favorable impact on the operations or the culture of the organization.
There is data that indicates a gap in the strategic and tactical elements of a representative high performing HR group.
Specific areas of opportunity include:
- Performance management process and system
- Onboarding program
- Personnel development . . .

Cultural Due Diligence Assessment Results

Cultural Due Diligence Interview Results

1. How do people feel about being merged/acquired?

The corporate perspective is different from the field’s perspective. Here at headquarters the questions are, “Is there room at the inn?” and “Will I go to Atlanta?” In the field, people are wondering if they will have to work for less money. Some are angry that it came to this. Did the CEO and the SVP just sell us out? People’s emotions run the gamut from “How could you do this?” to “What took you so long?”

It’s no shock that we merged, but people are set back on their heels that it is this acquirer...

Operating Style Questionnaire

What aspects of the way your organization operates contribute most to its success/effectiveness?

What characteristics of the way your company operates most hamper or interfere with its ability to compete?

List the company’s operating strengths. (What does it do best?)

What would you identify as the company’s operating weaknesses? (Where is the company most vulnerable or least effective?) ...

Operating Style Analysis (Part II)

1. Spending Habits: Frugal or Free Spending
Comments regarding this issue: __________________________________________

2. Decision-Making Process: Deliberate or Expeditious
Comments regarding this issue: __________________________________________

3. Power and Authority ...

M&A Organizational Culture Checklist

Organizational Culture Checklist covers questions for:

Owners
Staff
Customers / Community
Competitors
Operations

M&A Culture Research

Cultural Integration: The "X Factor" in Merger Success and Failure

Organizations have grown far more sophisticated and skilled in their ability to execute the integration process. The one area where companies still struggle, though, is in merging disparate cultures. This is the black box of integration, the most complex problem that executives encounter in M&A ...

Answers to Culture FAQ's

Answers to FAQs about Merging Cultures After an Acquisition

Answers questions including:

How do you begin merging cultures after an acquisition or merger?
What is organizational culture? And what is cultural integration in M&A?
Why do so many M&A culture change initiatives fail?
Where should culture change initiatives be focused. . .

M&A Culture Presentations

Organizational Culture and Mergers: The Hard Facts

Hard Facts About Culture

Strategy is a product of your view of the future.
Culture is essentially the product of your history
That will always present a challenge in ensuring that the corporate culture is aligned with and supports your plans for tomorrow.
VERY FEW culture characteristics wield a make-or-break influence …

Culture Integration in Mergers & Acquisitions

Agenda

Merging Requires New Culture and Behaviors
Closing the Gap
Work Culture Implementation Schedule
Work Culture Team Mission Statement
Mission of Organizational Development
Characteristics of An OD Function
What Are We Doing
Quote on Culture . . .

Cultural Differences in Mergers and Acquisitions

The cultural differences between the Acquirer and Acquired Company are identified.

Content

Reality
How You Described Yourself
Cultural Traits...