OVERVIEW:
The people who put together mergers, acquisitions and joint ventures are spectacularly intelligent people.
And yet, I believe they are doing their due diligence with only half a brain.
BACKGROUND:
Why do so many mergers, acquisitions and joint ventures that make so much synergistic sense and should be very profitable, fall so far short of expectations, or simply fail miserably?
The answer has to do with the fact that the due diligence efforts of the architects of the deal are out of balance.
By design, the due diligence process focuses primarily on financial and legal matters. The net of these activities is a snapshot of the financial condition of the target, rendered in the form of a financial balance sheet.
Financial and legal analyses are left-brain processes.
The traditional due diligence process lacks balance. It lacks the right-brain perspective. It requires a “People Balance Sheet” to accompany the financial balance sheet.
People analyses are right-brain processes.
Making critical final decisions on the results of a due diligence based only or mostly on financial and legal information developed using primarily left-brain methods means decision-makers are basing their actions on only partial disclosure and an incomplete due diligence.
That is a critical flaw in the traditional due diligence process and is the basis for my assertion that “the architects of the deals are doing their due diligence with only half a brain.”
SOLUTION:
At www.OrganizationalDueDiligence.com you’ll learn about our proprietary process that will create a “People Balance Sheet” to accompany the financial balance sheet.
Using our methodology and the client’s expectations of what they hope to find in the “people” aspect of their ideal M&A target or JV partner, we will analyze a representative cross-sample of the people variable of the proposed deal – all sites, all shifts, all levels within the organization.
Upon completion, we will provide the client with “People Balance Sheets” for the entire organization and each of the functional areas. Clients will receive numeric data showing them how near or far from their “ people ideal for the deal” they are.
And in addition, clients will also receive a written recommendations plan detailing the steps they should take to move closer to their “people ideal for the deal.”
The financial balance sheet and the “People Balance Sheet” will give the decision-makers FULL DISCLOSURE and a COMPLETE DUE DILIGENCE. Fully armed and informed, they will be prepared to back away from the deal, or proceed, knowing what they are in for, and perhaps negotiate more favorable terms.
All employees are assets – the trick is to know if they are positive assets or negative assets, BEFORE closing the deal.
Don’t invest financial capital until you’ve analyzed human capital.
Please call 800.597.9972 for a free 30-minute telephone needs assessment.
