People prospectus executive summary
- 1. Your People Prospectus™ The Organizational Due Diligence® Acorn Consulting Inc 425.231.0085 www.AcornConsultingInc.com 1
- 2. 2 Acorn Consulting Inc Are you investing in your future dream investment, or in a money pit?
- 3. 3 You’ll Have To Live With The Results of Your Due Diligence Not your advisors. You. JOINT VENTURE: A Real Situation I faced and fixed Standard financial due diligence did not uncover: • Partners’ incompatible, clashing corporate cultures and styles • Poles-apart disagreement regarding management values • Many visible “red flags” indicating serious employee fear issues Deal failed: defalcation, unethical business practices Direct cost losses >$2M. Additional estimated losses >$2M If this were your JV, how would your management react? Would a solution that surfaced all three problems and generated an ROI of 1:355 be acceptable? A COMPLETE due diligence = Financial + People Data
- 4. 4 Some things to think about: Financial prospectus “left-brain” People Prospectus™ “right-brain” Are you doing your due diligence with only half a brain?
- 5. 5 You’ll Have To Live With The Results of Your Due Diligence Not your advisors. You. Merger: A Real Situation I faced and fixed Standard financial due diligence did not uncover: Issues of non-performance in executive team Years of local management conflict, denial in re: performance Managerial fearfulness about being terminated At risk: Multimillion dollar investment in new regional data center; continued profitability of local and regional sales operations; market share; millions in discrimination suits If this were your merger, how would your management react? Would a solution that resolved all three problems and generated an ROI of 1:134 be acceptable? A COMPLETE due diligence = Financial + People Data
- 6. 6 Achieve FULL DISCLOSURE in Your Due Diligence People Data Numerical And Legal Data People Disclosure Prospectus™ Legal & Financial documents from CPA, attorney, auditor, inspector, etc. Full People: • Assets • Liabilities • Equity Two Distinct Balance Sheets Financial: • Assets • Liabilities • Equity A Complete Due Diligence COPE™ Score
- 7. 7 You’ll Have To Live With The Results of Your Due Diligence Not your advisors. You. ACQUISITION: A Real Situation I faced and fixed Standard financial due diligence did not uncover that: • The retirement-age owner “was” the company • There were no sustainable processes • There was a $2M annual drain, on-going for years If this were your acquisition, and your management realized this AFTER the deal closed, how would they react? Would a solution that resolved all three problems and generated an ROI of 1:82 be acceptable? A COMPLETE due diligence = Financial + People Data
- 8. 8 Your People Prospectus™ The Organizational Due Diligence® People Prospectus™ + Financial Prospectus = FULL Disclosure (The TOTAL Picture) Provide valuation to “move forward,” with risks Joint Venture Acquisition Merger A B A B “Health Check” Identifies existing people assets, liabilities and equity in the target organization or your company A identified A B
- 9. 9 You’ll Have To Live With The Results of Your Due Diligence Not your advisors. You. “Health Check”: A Real Situation I faced and fixed Standard financial due diligence did not uncover: • Widespread, intense, long-standing, buried gender & racial conflict • Incompatibility of former paternalistic management style with more open climate requiring employee involvement • Lacking a frame of reference, employees were threatened by new core value and processes of “employee involvement” At Risk: Declining customer base due to conflict; poor community reputation; potential union, and discrimination suits in the millions If this were your situation, how would your management react? Would a solution that surfaced all three problems and gave an ROI of 1:1427 (upper boundary) be acceptable? A COMPLETE due diligence = Financial + People Data
- 10. 10 The Balance Sheet for People How many deals have been less than successful because of pre-existing employee issues organizational issues political issues cultural issues issues that were ignored, underestimated, downplayed, or unknown?
- 11. 11 Besides Losing Money, What Consequences… ? Lost Time Lost Resources Stress / Ulcers Premature Aging Damaged Relationships Compromised Health Lost Sleep Fired Lower Employee Morale Discrimination Suits Loss of Market Share Bad Press And the most important of these (the one that cannot ever be regained) is …
- 12. 12 Lost Time Equals OPPORTUNITY COST
- 13. 13 Saving You Time and Money Reduce the Possibility of Getting Blindsided • Obtain valuable investor information from all levels Keep Target Management Honest • Like dating, “real” people typically surface after deal closes • Don’t be left holding the bag: Conflict distrust dysfunctional processes no “team” inadequate leadership asset mismanagement cultural challenges disappointing revenues Avoid Costly Surprises • Each person is an asset. • The question is: are they a positive or negative asset?
- 14. 14 Methodology of the People Prospectus™ Establish Expectations of YOUR Ideal People Profile Determine Congruence Between YOUR Expectations and Their Reality Wide “Vertical Slice” of the Organization All Sites; All Shifts; All Levels Data Gathered One:One and Small Groups Discreet Strategies for Engagement In Spanish as well as English
- 15. 15 It’s Your Call… Would you buy your dream house without having it inspected? Half a brain, or whole? Save months and millions by spending hours and thousands? The COMPLETE picture: FULL Disclosure Financial Prospectus People Prospectus™
- 16. The Organizational Due Diligence® 16 Your People Prospectus™ Know the whole story before you invest Don Burrows Acorn Consulting Inc 425.231.0085 [email protected] http://www.AcornConsultingInc.com