Financial and legal due diligence are standard. Leadership due diligence is still unusual, which is odd given that the people are usually what the acquirer is paying for.
We did this for a FTSE100 business acquiring a significant company. The Chief People Officer wanted a clear view of the target's leadership before the deal completed. Here is what that work involves.
Map the functions, not just the top team
The executive team is the visible part. The value often sits one or two levels down: the people who run the sites, hold the client relationships or know the systems. We map every person in the key functions, their role, tenure and career history, and how the function is structured.
Profile the leaders
For each senior person, a profile built from public sources and market conversations: what they have done, how they are regarded, whether they are likely to stay through a change of ownership, and what it would take to keep them. This is done with discretion; nobody in the target knows it is happening.
Analyse the functions against comparators
Is the finance function the right size? Does the commercial team have the capability the acquirer's plan assumes? We compare each function against industry comparators and say where it is strong and where it is thin.
Report to the deal team
An executive report the leadership team can use in the final weeks before completion: who to lock in before announcement, who is a flight risk, which roles will be duplicated, and where the acquirer will need to recruit on day one.
Why it is worth doing
Three reasons. Retention offers made before completion are cheaper than counter-offers made after a resignation. Integration plans built on an accurate view of who does what avoid the six-month discovery period. And the acquirer sometimes finds that the leadership it assumed it was buying has already half left.
It takes three to four weeks and can run alongside the other workstreams without anyone in the target being aware of it.