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#CultureDueDiligence


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A Values-Based Approach To Beat The Odds In M&A


In the buildup to an acquisition, culture is often considered as secondary compared to hard numbers. But, Scales began to see across failed M&As that culture was singled out most often as the defining issue.


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Why many M&A deals fail by not taking organisational culture into account


Even though companies recognise culture as a key factor in the M&A’s ultimate success, most of them fail to conduct cultural due diligence before they finalise the deal.


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Mergers And Acquisitions: Why Due Diligence Models Need A Refresh


As the market heats up for mergers-and-acquisitions activity, it’s time to evaluate and re-engineer the typical business framework used for due diligence.


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Overview

Globally, mergers and acquisitions worth a total of nearly $5 trillion take place every year

The number of deals that take place around the world every year is growing rapidly. At the same time, they are becoming significantly more complex, involving multiple markets and industries. However, studies show that 80% of mergers and acquisitions globally fail to create value. In more than 30% of these, cultural misalignment is one of the key reasons cited for failure.


Data-based culture due diligence: a new practice


Cultural incompatibility is the single greatest reason that deals fail to create value.


However, the due diligence phase of M&A transactions still focuses primarily on financial and legal aspects of the deal and excludes an examination of culture and potential cultural misalignments that could undermine the vision and financial objectives of the dealmakers. Too often, culture is treated simply as a buzzword and remains unaddressed until after a deal is closed.


The difference between a successful merger and acquisition (M&A) deal and a troubled one often hinges on whether culture is assessed in the due diligence phase of a transaction. Successful transactions require a holistic view of culture at an early stage, and a strong focus on people-related issues.


Yet ‘cultural due diligence’ is virtually unknown because investors lack a clear way to measure culture.

MnAGenome

Data-driven culture intelligence to sharpen merger & acquisition strategies


To address this need, Culturelytics has created the world’s first AI-driven analytics platform designed to help acquirers conduct data-based culture due diligence.



Equipped with this data-driven culture intelligence, buyers can sharpen their deal strategies by adjusting valuation to account for cultural issues or planning effective interventions to improve cultural alignment.


How it works

We use a four-step process to provide our clients with smarter, clearer, more relevant data on culture than has previously been possible.

Mandate

We measure what matters, based an in-depth understanding of your business mandate.

Inputs

Informed by the latest behavioural science, we collect smarter data.

Analysis

We use the power of AI to analyse the data, turning the complexity of culture into clear insights.

Outputs

You get data-driven culture insights that are clear, detailed and actionable.

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Mandate

    We start by getting a clear understanding of your goals for the deal.

  • Digital transformation
  • Diversity, Equity & Inclusion
  • Employee well-being
  • Accelerated growth
  • Post-merger integration
  • Innovation
  • Appropriate risk management
  • ×

    Input

      We collect smart data, including:
  • HRIS & financial data on the companies
  • Proprietary survey of target company employees grounded in behavioural science
  • 360º web scan for employee attitudes and perceptions of the deal
  • ×

    Analysis

      We analyse the data using our proprietary AI-powered culture analytics platform
  • Powerful algorithms: Can analyze 9,000+ patterns of behaviour
  • Robust benchmarking: Data set includes 6000+ companies in 60 countries and 24 industries
  • Flexible: Slices the data along multiple demographics (e.g. seniority, tenure, location)
  • Relevant: Algorithms customised to reflect client mandate
  • ×

    Outputs

      Our analysis is presented in a customised, interactive, visually intuitive dashboard for each client with unique:
  • CCQ™: Culture Coherence Quotient
  • VAF: Value Adjustment Facto
  • Culture dashboard for leaders

    Data-driven culture insights. Smart interface for leaders.

      The results of our culture assessment are presented to clients in a user-friendly, visually intuitive dashboard for leaders that includes

    • CCQ™: Culture Coherence Quotient – A single score telling you how well the target company’s culture is aligned to your goals for the new entity.
    • VAF: Value Adjustment Factor – Impact of cultural misalignment on the value of the deal. This helps you shape deal strategies, either adjusting asset valuation or planning pre- or post-merger interventions to align cultures.
    • Detailed insights – On the cultural alignment (or misalignment) between buyer and seller, with recommendations for how to improve key indicators, using our comprehensive 7-dimension framework for understanding the impact of organisational culture on M&A.
    Know more →

    Industry Insights



    Thought Leadership

    Apex Awards'19

    Culturelytics founder, Yeshasvini Ramaswamy, played an active role in the Apex’19 Summit & Awards. The annual event is attended by the leaders of India’s premiere private equity and venture capital firms.


    Ms. Ramaswamy took part in the kick-off event, at which a senior panel discussed a range of topics, including emerging trends in venture capital investments and exits, the sectors investors are currently looking to back, key legal and regulatory pitfalls, and more.






    Culture Quotes

    Team

    Yeshasvini Ramaswamy

    Serial entrepreneur & Founder



    Recognized as a leading woman entrepreneur in India, Yeshasvini combines deep expertise in human resources, analytics and investment management to bring analytical and financial rigour to cultural transformation projects.

    Smita Tharoor

    Co-founder



    Based in London, Smita has more than 30 years experience in organizational and people development for both corporates and large-scale government organizations. She is a thought-leader on unconscious bias, helping organizations create more inspired and productive workforces.

    Deepak Rahul

    Lead, Business transformation



    Combining a sharp entrepreneurial mindset with a decade of experience in finance and law, Deepak leads our business transformation and HR strategy projects. He serves as a Partner in our sister concern e2e People Practices, a boutique consulting firm.

    Rekha Mallan

    Lead, Client Relationship & Partnerships



    Combining expertise in business management, IT, and training and development, and a passion for working across cultures, Rekha has led numerous projects to improve business systems and develop client partnerships for companies both in India and internationally.

    Suraj Kumar

    Behaviour analyst



    An analytics expert with a passion for understanding human behaviour and problem-solving, Suraj has been instrumental in creating several human resources back-office analytics solutions used by hundreds of employees.

    Cly Wallace

    Strategic Communications



    A strategic business communications consultant based in London, with 30 years experience creating targeted communications for corporates and other organizations, including The Coca-Cola Company, the Red Cross/Red Crescent and the United Nations, in markets around the world.

    Varun Gupta

    Product Innovation and A.I.



    Varun has 15 years hands-on experience in artificial intelligence and predictive modelling, mergers and acquisitions, private equity investing, strategic planning, and organizational restructuring. Equipped with an MBA from Harvard Business School, he is also a Chartered Accountant.

    Contact



    D, Manor House, 19/3/1, Palace Orchards, 8th Main, 18th Cross, Sadashivnagar, Bangalore - 560080


    35 Tradescant Road, London SW8 1XD.


    Request a demo