HR due diligence for external growth

Assignment

Assessing two key people during a phase of pre-purchase due diligence

Issues : Supporting growth
Services : Leadership Consulting

Context

  • This mid-cap business designs, produces and installs industrial instrumentation equipment on site. It has an external growth policy
  • It approached a small firm with fifteen employees and high added value that would bring it complementary technology and customer references
  • Having entered a phase of exclusivity, the purchaser wanted to assess the potential of two key people in the firm, the founder having chosen to retire
  • One of these two people was the Technical Director, and the other was the Director of Operations

Eurosearch & Associés involvement

  • We formalized the client’s concerns based on their first contact
  • The two directors to be assessed sent their résumés and filled out online questionnaires, one on their workplace behavior and the other on motivation
  • We met each director for two hours as part of an open interview in which the following was discussed: their career path, current position, vision of the company, and personal career goals
  • The two assessment questionnaires were handed over to each person and discussed at their request
  • Their reputation was checked, specifically on the internet
  • An assessment report summarized each candidate’s career path, underlined by their @-reputation, behavior, sources of motivation, contribution within the company, and dedication to the planned merger
  • This explicitly met the requirements of the concerns formalized when the assignment began

Results

  • The entire assessment process lasted ten days, fitting in easily with the exclusivity period, before a decision had to be made
  • The two directors were not closely involved in the founder’s selling process. They partially found out about it. They underlined the lack of resources available for carrying out the three R&D projects
  • Neither of them aspired to manage the company. Rather, they wanted an improvement in their working conditions and resources to fulfill their objectives
  • Without a leader, the target firm will not operate well on its own
  • The decision was therefore made to immediately absorb it into the purchaser’s legal structures, making sure not to stifle its capacity for innovation and initiative