Interviews and reporting of findings in due diligence
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Would be very interested if you have any experience with interviewing people during the due diligence. Does it work? Will people answer your questions or are the more reserved?
And do you have any good advice how to report the findings of a due diligence (so that it is easy to read and understand)?
Thank you 🙂Yes interviewing people during due diligence helps and it works. It can bring different levels of information and insights specially if the interview selection was diverse and at different employee levels. I believe if the purpose of the interview is to gain knowledge, insights and more information mostly people will be open to share and support. Preparing for the questions prior to the interviews will help develop statistics and graph for reporting purposes.
Interviewing people during the due diligence does work. Just make sure to ask open ended questions and give space for the respondent to reply without rushing them to the next question. Also, try to keep asking why.
reporting the findings would be on a likelihood/business impact basis. Thus, riskier material findings are on top the report.
I think interviews are extremely valuable. Not only can it help clarify and understand facts that may have been found through document research and other activities but it can also serve as an opportunity to test hypothesis and probe about more intangible aspects of the organization. It is one thing to review a company’s HR documentation and written value and mission statements another entirely to receive feedback and depth of adoption by the employees.
Agree with what others have said, it gives a qualitative and/or subjective perspective on data and information received. Often you can triangulate answers based on asking multiple employees similar questions if provided vague (written) answers in the data room. The questions may not always be things the company wants to commit to paper.
In addition to the qualitative value that others have referenced, I think interviews can improve the DD process in two other ways: 1. allowing for more dialogue beneficial to integration planning and 2. building relationships to get buy-in from the target company employees. Since integration planning should start during DD, asking open-ended questions and giving space for descriptions of the target company’s current processes will inform how the acquiring company structures their integration planning. Secondly, if key contributors at the target company are involved in the conversations before the deal closes, they will feel included in the DD and planning processes, making them more likely to advocate for the changes resulting from the integration.
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