Cultural due diligence: what and why?
Even more sorry statistics
So you know the M&A statistics. There are enough of them, after all. In a nutshell, they come to the conclusion that 50 to 70 percent of all mergers and acquisitions fail or do not yield the results hoped for.
How does this happen? The necessary tools for financial and legal due diligence were surely perfected long ago. Yes, but mergers and acquisitions rarely founder on financial or legal issues.
Culture shock and incompatible value systems
So where is it going wrong? Back to the statistics. Enquiries are regularly made among international managers in order to understand these statistics better. And what does the international manager say? That in mergers and acquisitions the main hurdles are culture shock and incompatible value systems.
Is this sufficient reason to take a thorough look at these obstacles prior to any merger or acquisition? Sufficient reason to map out in advance the cultural factors that will affect integration and cooperative mechanisms? Sufficient reason to enrich your due diligence with a cultural component?
Cultural due diligence
Our cultural due diligence gives you a picture of the people and cultures behind the figures. A picture of the presuppositions, patterns of thought and behaviour, adopted principles of organisation, and so on. And also a picture of a variety of perceptions: what is good leadership? Good communication? Good business dealings? Good cooperation? Which culture(s) do people themselves say they belong to? Which cultures do the people themselves consider to have influence? What motivates the people? And so on and so on. A picture of what people consider normal, a picture of ‘what goes without saying’.
Our cultural due diligence is both a fully-fledged tool for decision-making prior to a merger and a fully-fledged management tool afterwards.
Before the merger you will receive:
- an outline including differences, sticking points, similarities and interesting possibilities,
- an analysis of the critical risks and
- a recommendation (red light, green light, flashing light).
After the merger you can make use of our cultural due diligence as a management tool in your integration programmes. What is more, you can start from day one, because you already know where the priorities should be. And you have a tool with which you can monitor the progress of integration.
Would you like more information about our cultural due diligence? If so, don’t hesitate to contact us.
See also: mergers & acquisitions (introduction)