Due Diligence – People
Organisational Change

It is widely recognised that an organisation’s people are often it’s greatest asset.

Surprisingly, however, investors have historically underestimated the significance of people issues in mergers and acquisitions. Traditional approaches to due diligence have involved gathering financial, commercial and operational data in order to make predictions about an organisation’s potential.

At Davis Associates we believe that investors need to pay greater importance to the human capital within a potential purchase. What does the current culture of the organisation look like and what competencies, abilities and attitudes are embedded within it’s employees?

Gaining a thorough and objective evaluation of the current leadership capabilities is critical before being able to make substantiated predictions about how these relate to implementing future business strategy.

A recent study, discussed in the Harvard Business Review, compared people-related practices in successful and unsuccessful mergers & acquisitions. It found that in the deals classified as ‘successful’ nearly 90% of the acquirers had identified key employees and targeted them for retention during due diligence or within the first 30 days after the announcement. By comparison, this task was carried out in only one-third of the ‘unsuccessful’ deals.

As part of our ‘People due diligence’ service we can help:

• Determine how well the target organisation’s current culture and structure will mesh with the proposed new company.
• Explore internal leadership strengths (and how to leverage these) as well as identify competency gaps within the senior team.
• Make recommendations about how to develop senior executives internally as well as improve the top-team’s effectiveness.
• Reduce the risk involved in managing people issues and minimise the natural apprehension felt by employees going through a period of change.
• Bring greater quantitative and qualitative value to your current due diligence processes.

Our team can help you identify the key members you need to keep when merging or purchasing a company. Call our HR consultants for more information on +44 (0)20 8398 6644