Due Diligence & Culture

Traditional due diligence is dated. It's time to integrate a simple evaluation of company culture.

Would insights into a company's culture influence your appetite to invest? Of course it would. Yet, this area is rarely evaluated with standard due diligence processes in the world Mergers & Acquisitions.

Dated Due Diligence

One of the most important and challenging processes in any M&A deal is the due diligence process. Buyers need to verify the accuracy of seller representations, and often times conscientious sellers want to ensure their company is going to a buyer with an aligned set of values. To complete effective due diligence, the extensive work is often broken up into distinct categories which include administrative, financial, assets, taxation, legal and of course strategic fit. There's one data point that's often overlooked, or simply not available: The health of the company's culture.

Evaluating Culture

While buyers rightly focus on financials and traditional measures, tremendous insight can be gauged through the thoughtful assessment of organizational culture. But how can that be achieved?  In the book Good To Great, Jim Collins drives home the point that in any company the people doing the work know the most about it. So why not simply ask the people doing the work? Right Workplace has developed a process that focuses on a limited number of key predictors that allow companies of all sizes to measure (and improve) their culture.  The process is administered independently by Right Workplace so team members of any target company can trust the integrity of the process, and the anonymity of their feedback. With a concise survey that takes five minutes to complete, team members can provide scored feedback in the three core areas that make a "Right Workplace". In addition, the targeted narrative feedback solicited encourages team members to provide constructive and thoughtful ideas on how to drive improvement over time. The results can be transformative, and the insights can greatly compliment the traditional areas of due diligence in assessing a company for acquisition or merger.

Simplify Culture

The Right Workplace process translates all feedback into a single grade which can be used as a benchmark for future improvement, or a key assessment point in the due diligence process. In addition, simply executing the process communicates to existing team members that a potential acquiring company actually cares about culture.  This alone can soften the fear often associated with potential changes in control.

Early Successes

Right Workplace has successfully helped many companies to measure and improve culture. In the investment space, Right Workplace has partnered with private equity firms (including Auxo Partners) and family offices (including FOD Capital) to ensure that culture is always part of how portfolio companies are evaluated, nurtured and ultimately improved. To make the Right Workplace Program part of your standard due diligence process, contact Right Workplace today - We're excited to partner with you, and we're confident that we can provide the one data point that has been traditionally lacking:  The health of a company's culture.