Why Address Culture Alongside Traditional Due Diligence?

M&A is one of the biggest types of organizational change causing stress and uncertainty to employees, so cultural due diligence is a necessity. An anxious or unfocused employee base loses productivity. Proactively managing communication, stress and the change process is critical when organizations undergo such transformation and are trying to achieve peak synergies. Managing and mitigating communication, stress and the change process needs to start as soon as possible – it’s never too early to consider the people, of whom the M&A will have the greatest impact.

Differing organizational cultural norms drive different behavior which, in M&A, results in culture clash. Culture clash occurs when the buyer tries to impose their systems and philosophies on the acquired firm, who naturally tries to resist and preserve their existing culture. The greater the degree of cultural differences, the greater the risks are for culture clash. We help clients mitigate human capital risks by providing data-driven intelligence on cultural distance, enabling buyers to more accurately assess resources and develop scorecards and dashboards to implement and monitor transformation progress.

Our expertise helps you address human capital risks at every step of the way through our cultural due diligence work stream:

The situations to use our approach include:

• Mergers, Acquisitions and Joint Ventures
• Restructuring
• Turnarounds
• Creating and implementing new strategic plans
• Implementing strategic or operational transformation
• Focusing groups on what needs to be done to create or implement a new strategy
• Gaining alignment or new energy on existing strategy

The benefits of this approach include:

• Pre-combination – Best-in-class organizations assess organizational culture at a high-level as part of their M&A pre-acquisition due diligence process. In many instances initial target screening is conducted quickly, covertly and with limited information. Endeavor’s Culture Assessment Tool Box incorporates specific assessments that are well-suited to these conditions. Our key differentiator and value to you is that our process quantifies cultural orientation and distance between companies to provide data-driven intel into overall deal valuation and negotiation.
• Integration Planning – Developing and implementing a detailed Cultural Integration Playbook is a critical game-changer that increases the odds for a successful integration. In Phase II, we integrate our cultural transformation methodology to three areas of performance and measurement, Systems, Structure, and People, and create a well-defined project plan and timeline that identifies the resources and activities required to fit the goals of the new business strategy.
• Integration Execution – In order for cultural transformations to “stick”, continuous attention, measurement, and feedback are required. It is necessary for the organization to develop needed skills for group and individual transformation. Individual coaching and the use of Leadership assessments are critical to the desired transformational state.

• Proprietary Endeavor Culture Assessment Toolbox