425.231.0085 www.AcornConsultingInc.com 1
Your People Prospectus™
The Organizational Due Diligence®Acorn Consulting Inc
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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
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Some things to think about:
Financial prospectus “left-brain”
People Prospectus™ “right-brain”
Are you doing your due diligence with only half a brain?
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You’ll Have To Live With The Results of Your Due Diligence
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
Not your advisors. You.
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Achieve FULL DISCLOSUREin Your Due Diligence
People Data
NumericalAnd LegalData
Legal & Financial documents from CPA, attorney, auditor, inspector, etc.
A Complete Due Diligence
People:• Assets • Liabilities• Equity
Financial:• Assets• Liabilities• Equity
Two DistinctBalance Sheets
Full Disclosure People
Prospectus™
COPE™ Score
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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
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Your People Prospectus™The Organizational Due Diligence®
Identifies existing people assets, liabilities and equity in the target organization or your company
People Prospectus™ + Financial Prospectus =
FULL Disclosure (The TOTAL Picture)
Joint Venture
A B A
B
Acquisition
A
“Health Check”
Provide valuation to “move forward,” with risks identified
A B
Merger
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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”
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
At Risk: Declining customer base due to conflict; poor community reputation; potential union, and discrimination suits in the millions
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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?
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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 …
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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:
Avoid Costly Surprises • Each person is an asset. • The question is: are they a positive or negative asset?
Conflict distrust
dysfunctional processes no “team”
inadequate leadership asset mismanagement
cultural challenges disappointing revenues
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Methodology of the People Prospectus™
Establish Expectations of YOUR Ideal People Profile
In Spanish as well as English
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
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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
People Prospectus™
Financial Prospectus
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The Organizational Due Diligence®Your People Prospectus™
Know the whole story before you invest
Don BurrowsAcorn Consulting Inc
425.231.0085
[email protected]://www.AcornConsultingInc.com