Loud Thinking

Archive for March, 2015

THE MANAGEMENT TIP OF THE DAY: Harvard Business Review

March 27, 2015

Before a Merger, Do Your Cultural Due Diligence

When it comes to M&A, most due diligence focuses only on the financials. Later, management is usually shocked to find the degree of differences that exists between their two, soon to be merged, organizations. Conflicting cultures is one of the bigger challenges of M&A, so you need to integrate cultural due diligence into the process early on:
Assess the institutional strengths of the acquired company, and compare and contrast these to the acquiring company to map where there are welcomed overlaps and where there are redundancies.
Understand the cultural dynamics of the acquired organization: How do they operate? How do they develop their talent? How are they motivated to succeed? What’s their executive management decision-making style?
Do a stakeholder analysis to understand the additional challenges from political, regulatory, union, and community sources to be expected in the wake of a merger.

Adapted from “Before a Merger, Consider Company Cultures Along with Financials” by David Fubini.