Leadership due diligence

The Leadership Due Diligence is designed to support investors and decision-makers with critical insights into the Leadership structure and organizational culture of target companies. Typically, it is delivered as a separate work-stream in the Due Diligence process, enabling deal teams to understand who the real value drivers are, how to mitigate human capital risk factors, and how to plan retention as part of the value-creation strategy.

M&A executives we support recognize LDD as an essential part of the deal-thesis because of its direct impact on:

Value Creation

The intensifying appetite for strategic market growth comes today under an increased pressure for higher business efficiencies and superior deal value.  

Indisputably, the transaction impact only produces long-term value if combined leadership capability transforms into a competitive advantage for the merged organizations.

 

Risk Management

While dealmakers place financial impacts as a primary concern in M&A, human capital topics and organizational culture remain among the most underrated aspects of deal-theses.

However, identifying and addressing Leadership issues and cultural specifics early on in the process reduces the risks of an investment failing to live up to its strategic objectives.

Integration Planning

With one in three deals derailing due to Management Team and organizational culture issues, ensuring leadership topics are on the priority list in Due Diligence is critical.

Investors who understand the ethos of leadership structures, their legacy and strategic value, are well equipped to design a robust integration plan and to anticipate risks while capitalizing on the synergies of merging cultures.

 

#1

reason for loss of value – lack of Leadership alignment and loss of key talent

%

of deals fail due to not preempting people risks

%

of critical talent is lost within the first 2 years after the transaction

%

of dealmakers claim Culture is the most critical driver of value creation

We support deal teams in the design of their value-creation blueprint by carrying out a 360o Leadership assessment. Our multi-layer methodology helps M&A professionals gain insights into human capital and cultural determinants, such as: ownership type & national characteristics, decision-making structure, collective and individual leadership track record, underlying values and beliefs and cultural sensitivity, behavioral patterns, transformational predisposition and risk aversion.

Through the information we derive from a series of direct interactions with the leaders in target companies we understand who the top performers, the internal champions and the customer relationship holders are. This becomes central to designing a long-term retention program in order to ensure business continuity.

In parallel, we map out critical areas of Leadership and Culture in/compatibility, thus enabling businesses to anticipate topics which can potentially complicate the integration of the acquired organization or jeopardize the intended investment impact.

Case Study

 

In times of expansion, we accompany businesses from beginning to end to ensure they leverage a disciplined, analytical and prudent approach to designing and implementing an integration plan. Based on the outcomes of the Due Diligence phase, we co-create a clear roadmap of activities and a sequence of integration points with an allocation of resources, capabilities and responsibilities from each side of the business.

We help organizations navigate the complexities of the transition by advocating for full transparency and clarity of communication and by fostering commitment on both sides. We organize and moderate workshops where the merging management structures spend time together discussing the values of each business, how they could benefit from each other’s knowledge and experiences, where synergies could be achieved and where functions need to be kept separate or reassigned.

The activities culminate in a proposed organogram for the merged entities, ensuring “right person, right role” set-up, definition of talent integration plans, identification of functional areas where the existing C-suite will need reinforcement to enable corporate strategy.

Case Study

We tailor our consultancy services to team up organizations across all phases of their strategic development blueprint, pre-DD and post-deal closure:

  • Market Access: Our partners leverage our evidence-based insights to save time understanding markets and determining what opportunities for investment and challenges they present. We review topics such as regulations, socioeconomic environment, latest industry developments, technological innovations, investment trends, areas with projection for growth.
  • Industry Intelligence and Target ID: We help widen the decision-making base by enabling organizations to truly understand who is who on the market and to create a shortlist of target companies, both in terms of business performance and leadership capacity. We map out all relevant businesses and their respective size, ownership structure, portfolio, as well as important developments with respect to the overall market situation.
  • Leadership Benchmarking: When it comes to Leadership Benchmarking, we provide comparative evaluation of all relevant C-Suite executives and combine this with our extended knowledge to enable companies to align expectations and design a consistent approach to leadership-related issues.
  • Talent Acquisition: Once a deal is through, our partnership continues with stronger focus on talent attraction and team composition whereby our core expertise in Executive Search becomes critical in resolving any emerging needs in the transformed organization.

Case Study

Dimensions of Leadership Due Diligence

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+ 44 208 936 7669

info@dynamisconsultancy.com

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