I recently asked M&A Post Merger Integration Services group members about the value of incorporating people data in the M&A process and received some interesting responses that pointed to a lack of coordination between strategy and operations, increased support for broader due diligence and better coordination between integration teams – all areas Talent Analytics can add value. My question? If corporate culture is quantified and HR does not normally analyze numbers, should culture become analyzed as part of the financial due diligence?
Lack of Coordination Between Strategy and Ops
In my experience, one of the main reasons why deals fail to generate value…the lack of a coordinated goal between different parts of the business….from the strategic side to the operational which ultimately owns the integration.
Evidence of Growing Support for Broader Due Diligence
I am starting to see boards pushing for a broader due diligence and with their influence and responsibility for shareholder value, they may eventually push for an integrated view and implementation from pre to post deal. It’s only a small shift but it may become more widespread.
Coordinating M&A Integration Teams:
Where I’ve found cultural due diligence / diagnosis work to be really valuable is in bringing the integration teams from acquirer and acquired together…it creates a basis for which to really understand the inner workings of each others business in a way which is objective and rational…two adjectives which are sadly all too rare in the deal space!!
These insights correspond with conversations I had at this week’s ACG Boston Conference as well. I asked one investment bank owner about the HR data currently being collected during due diligence. In his experience and it was primarily headcount, work history, and other tactical information. There is a lot of room to expand the current HR metrics being collected in due diligence to include more predictive insights about the disposition of the people doing the work to drive shareholder value: specifically, talent analytics.
How Does Talent Analytics Add Value to the Due Diligence Process?
Talent Analytics – data about the people doing the work (PDW) would provide critical cultural insight in the aggregate to facilitate strategic planning. Questions answered by the PDW data includes:
- How will division x,y or z handle additional regulations and changes to their daily work processes?
- Forecast an intact executive team – one that walks in lockstep, strong believers in the new strategy
- Who is at the greatest risk to leave the organization and why?
- Forecast whether the sales teams should be kept separate or quickly merged
Just some food for thought around using talent analytics data and technology to add M&A tremendous shareholder value.
If you are a fellow ACG Boston member and wanted to share your thoughts, please don’t hesitate to respond to the thread or reach out.
Mike Kennedy is a Technical Evangelist at Talent Analytics, Corp. He can be reached via mike@talentanalytics.com
