How to Influence Executive Leadership to Prioritize Due Diligence in M&A
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Engaging executive leadership in thorough due diligence during mergers and acquisitions is critical to the success of any deal. Despite its importance, leaders often face competing priorities, making it a challenge to dedicate sufficient time and resources to this process.
How can we, as Human Resources professional, effectively influence executive teams to view due diligence not as a checkbox but as a strategic investment?
Human capital is most important in any merger or acquisition. And, I agree, often leadership can often make quick assumptions about this topic and its outcome. I think it’s important to emphasize the existing relationships already built by the employees of a target to acquisition with the customers they have been serving (prior to acquisition). Discounting those relationships can be very detrimental to the future success of the merger/acquisition. Also, the acquirer needs to recognize that their culture isn’t always the best post-integration. Understanding these relationships, the value that the new company brings with its people, and focusing on why the target was acquired in the first place is where HR can provide a great deal of value in a market driven acquisition integration.
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