September 6, 2018 at 9:06 am #67248
Good and effective communications is essential in due diligence process, especially when the Target is operating in different or less familiar industries. DD team may need to converse with experts in the field, talking with key customers, suppliers or competitors, sometimes past employees. Part of the collected information would be compared to what is presented by the management of Target. Of course, financial data of the Target may also reveal hidden issues. I found good soft skills need to learn and practice. Would you like to share some experiences with us?September 18, 2018 at 1:26 pm #67762
my take on this is negotiation skills is key towards an effective conclusion to a M&A deal. There is always a risk that the deal will drop off so one need to be very good in negotiating and achieve a situation where both parties feel comfortable to enter into an eventual deal.October 10, 2018 at 1:03 pm #68872
I have two different perspectives from my personal experience. On one hand it is required to have a very clear view on numbers, facts and you have to be precise and fast to identify the needed topics – therefore a person without soft skills is ok or even required.
On the other hand the results have to be discussed and validated with the teams and this has to be done by a person with very good soft skills.December 16, 2018 at 8:34 am #73609
I think that soft skills is needed throughout the DD process, especially when liasing with the Target’s owners and employees.
Good soft skills and communications will help a long way – it will likely result in getting more information and in a more expedient manner. This is critical especially when one has a tight deadline to meet.January 13, 2019 at 8:28 pm #75692
I think having the ability to deal with people is very important in both the dd process and the closing process.
I think sometimes different personalities clash and cause issues with completing transactions.March 4, 2019 at 4:02 pm #80509
Experience tells me that the most important principle for this type of operations is the KISS (Keep it Simple, Stupid) principle.
I’ve suffered countless reports with contrived information. At times, I’ve had the impression that advisors complicate things as maximum in order to dress up their lack of understanding of the project.
The winning formula would be Ethics + straight forward vision + KISS principle!July 11, 2019 at 7:14 pm #88786
From my experience, it is ideal if you have a DD team that is composed of highly technical people, people with well-developed soft skills and finally a group of people that is somewhere in-between. Regarding certain aspects of DD, such as financial DD and legal DD, it is better if you have very technically adept people take care of this aspect. On the other hand, there is also a need for a holistic view of the entire DD process. This aspect is better if done by people with well-developed soft skills, as they have to converse and evaluate every step of the way, both internally as well as with the target.January 14, 2020 at 5:08 pm #104450
It is important to be open, patient and accepting when dealing with different cultures. Value systems and traditions across continents entail a need for robust soft-skills so as not to inadvertently cause offence. You can have the smartest guys in the room working for you, but if their soft-skills are not up to scratch, they risk insulting the wrong person and potentially derailing or severely hampering the DD process.March 20, 2020 at 3:34 am #108746
From my experience, soft skills that can come in handy are the ability to deal with ambiguity, patience, and keeping it simple.May 11, 2020 at 12:12 am #109989
Bradley D. SotoParticipant
Soft skills for all DD team members is critical for success. The best DD team members are those who do two things very well: actively listen and ask very good clarifying questions. These two skills have helped DD teams uncover vital information about “how” a company does its work that would not be either easily found in the documents from the data room or from other sources.May 21, 2020 at 4:18 am #110279
Soft skills is very important if the two entities are to combine well. One experience I had was that although the intention was good in increasing awareness of the process through soft skills, there was a hierarchy in the two entities that prevented a steady flow of ideas and concerns. For decades employees were “yes” men/ women and this carried on during the DD phase. The soft skills were in full force – but the hierarchy prevented the right questions to be asked in the fear that they would seem too aggressive/ probing.May 21, 2020 at 8:49 am #110295
Interview skills, communication skills and broader knowledge are important. I remember that only top staff in a firm were sent to DD jobs back my due diligence days many years ago.August 28, 2020 at 12:34 am #112929
Two key qualities that I found to be helpful during DD are having an appreciation for cultural differences and being able to adequately manage politics. In dealing with organizations operating across different geographies, taking the time to understand the culture and common practices of the individuals you are connecting with, puts your discussions into perspective. It also helps in understanding the “why” in decision-making.
With respect to politics, especially in matrix organizations, this could be of significant importance. Being able to manage clashes of opinion between different functions and encouraging full transparency within the deal team will definitely make the long nights of working through diligence worthwhile. Instead of focusing on the differences, developing mutual milestones may eliminate some of the challenges.October 10, 2020 at 4:23 pm #113878
Wei Zhong OngParticipant
I think soft skills are important when it comes to due diligence processes. It takes more than questioning to suss out hidden information from a person or the target company. The M&A analyst has to learn to be tactical and spot the potential red flags and dive in deeper on that to find out more.November 22, 2020 at 4:36 pm #114965
When talking about a buy-side financial due diligence, good analytical skill can help you identify risks of the target (e.g., balance sheet risk, performance risk, operational risk), while good communication skill helps you to past your findings to the acquirer in an easy understandable way.
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