It is surprising that some professionals neglect the personnel aspects of a business during the due diligence process, especially where the founder of the business, who has in most cases been instrumental in its success, is leaving the organisation at the completion of the sale.
The outcome in these situations places even more importance on understanding the behavioural styles of those remaining in the organisation and even more so where a new manager is to be appointed.
The importance of understanding how to communicate with team members, how they “listen”, understanding their strengths, what motivates them (and what they try to avoid) as well as their “development areas”, is fundamental in managing an efficient and effective team. Without this information from the outset, it takes weeks (sometimes even longer) to really understand “what makes team members tick”, quite apart from knowing about any emotional issues (stress, pressure, insecurity etc.) that might impact on their performance.
Sometimes it might take more than obtaining a behavioural report and we are seeing an increased use in the Open 360 assessment, which can help in the process.
Some time ago we were informed of a case where the due diligence process did not include a thorough understanding of the people involved in the management of a company purchased by a large overseas organisation. The consequences proved to be expensive.
The accounting firm involved focused on the numbers without any attention to the personnel who were to administer the company after the retirement of the owner/founder. The owner, because of his strong competitive and somewhat aggressive style, suppressed those departmental managers who reported to him.
Initially, a general manager was appointed from within the newly acquired company and that was the first mistake. The appointment was made because of seniority, but completely overlooked the management style of the individual.