Fred Skinner
Chief Human Resources Officer
Eversana
Episode 367
The Real M&A Due Diligence: Valuing Culture Over the Numbers
Current chapter: Built by People podcast features insights from world's top HR leaders
Built By PeopleDecember 24, 2024 · 15:11
Thesis
“A genuinely cultivated, simple, and trust-based company culture, centered on employee engagement, client delight, and financial results, is the indispensable foundation for sustainable success, especially through rapid growth and mergers.”
Show notes
In this episode of the Built by People podcast, sponsored by Previ, host Dave D'Angelo chats with Fred Skinner, the Chief HR Officer at Eversana. Fred shares his initial hesitance but eventual passion for HR leadership, detailing his career progression through various industries. Fred discusses Eversana's unique approach to merging cultures during company acquisitions and emphasizes the importance of simplicity and culture-first strategies in maintaining employee engagement and operational success. Key elements of Eversana's methodology include focusing on cultural alignment during acquisitions, fostering communication, and integrating cultural beliefs into everyday practices. 00:44 Meet Fred: Career Journey and Background 02:40 Building Eversana's Cultural Foundation 06:31 Maintaining Culture During Global Expansion 09:16 Eversana's Recognition as a Great Place to Work 12:02 Lessons from Rapid Growth 13:52 Parting Advice and Conclusion
What you'll take away
- 1Prioritize cultural alignment and fit above financial considerations during M&A due diligence to prevent economic value destruction and ensure successful integration.
- 2Build a company culture on simplicity with clear 'key results' (employee engagement, client delight, financial outcomes) and 'culture beliefs' (how to behave) that are universally understood and embraced.
- 3Lead with trust to foster an employee-empowered organization, minimizing bureaucracy and 'getting out of the way' of talented individuals rather than over-managing to a small percentage of rule-breakers.
- 4Maintain transparent and frequent communication (good or bad news) to keep employees informed and aligned, especially crucial during periods of rapid growth and change.
- 5Embed cultural beliefs into daily practices, storytelling, recognition, and even compensation to ensure authenticity and reinforce desired behaviors throughout the organization.
What most organizations get wrong
- •Eversana prioritizes cultural fit *before* financial assessment in M&A, stating, 'we lean with, with culture first to make sure that it's a good fit for us.'
- •Instead of creating bureaucracy for the 1% who might break rules, Eversana designs systems 'where we can lead with trust,' assuming 99% of employees are engaged and will work within reasonable boundaries.
- •Eversana ties compensation directly to cultural beliefs, a practice Fred notes 'a lot of people are afraid to do,' emphasizing that misalignment here can 'break a company.'
In Fred's words
“culture eats strategy for breakfast.”
This classic quote highlights the foundational importance of culture over strategic planning in M&A success.
“If you have really happy, engaged employees, you're going to see the pull-through with really happy, engaged clients, and then the financials are just going to come for the ride.”
Lays out a clear, causal link between employee experience, customer satisfaction, and overall business results.
“we lean with, with culture first to make sure that it's a good fit for us. And then after we know that, when we expand, we double down on it”
Describes a proactive and culture-centric approach to M&A and global expansion that prioritizes fit.
“so many organizations, you know, then cater to this 1% and we want to create something pretty special here where we can lead with trust. We know we're going to hire amazing people that are really good at what they do. We should get out of their way.”
Emphasizes building a high-trust, low-bureaucracy environment that empowers high-performing employees.
“always communicate, which is one of our cultural beliefs that we have. And it's so, so true and so easy to miss.”
Highlights communication as a frequently overlooked but essential element of maintaining culture during growth.
“You can't fake a genuine focus on culture. You just can't fake it. People can read through that. They're smart.”
Stresses the critical need for authenticity and transparency in leadership's commitment to culture for true employee buy-in.
The problems this episode addresses
- •Many organizations struggle with M&A integration because they fail to consider culture, leading to a destruction of economic value in acquired companies. (Sales intelligence: 'Is your M&A strategy truly accounting for cultural integration, or are you risking significant value loss post-acquisition?')
- •Rapid growth often leads companies to introduce excessive bureaucracy, designed to manage a small percentage of rule-breakers, which stifles the 99% of engaged employees and erodes unique culture. (Sales intelligence: 'How can you scale your operations without sacrificing agility and employee empowerment to unnecessary administrative burdens?')
- •Superficial or inauthentic attempts at culture building are easily detected by employees, resulting in disengagement and a 'just a job' mentality. (Sales intelligence: 'Are your culture initiatives genuinely resonating with employees, or are they perceived as top-down mandates without real impact?')
- •Traditional, lengthy performance review processes are often inefficient, bureaucratic, and do not genuinely foster development or engagement. (Sales intelligence: 'Is your performance management system a driver of productivity and growth, or an administrative burden hindering your high-performing talent?')
- •Companies risk undermining their stated values if their compensation and reward systems are not aligned with their cultural beliefs, sending mixed signals to employees. (Sales intelligence: 'Does your total rewards strategy actively reinforce your desired culture, or are there disconnects that could be impacting employee behavior?')
- •In high-growth environments, leadership often neglects transparent and frequent communication, leaving employees uninformed and disengaged during critical organizational changes. (Sales intelligence: 'How effectively is your leadership communicating vision and changes during periods of rapid growth to maintain employee alignment and trust?')
In this episode
Built by People podcast features insights from world's top HR leaders
Built by People
Fred Miller shares a little bit about his career journey and Eversound
The Career Journey of Chief HR Officers
Eversana has built a culture that is unique to many organizations
How Eversana's culture changed the life sciences
Culture beliefs are around employee engagement, client delight and financial results
What is a culture at McKinsey?
What strategies have you used to maintain an employee-empowered organization while expanding
Has Expanding the Company Made Culture More Important?
Eversana has been recognized as a great place to work for 6 consecutive years
Eversana Recognized as a Great Place to Work
You've endured a lot of rapid growth where you are. I'm curious what lessons derive from that experience
WSJDLive: The Culture of Rapid Growth
Fred: You can't fake a genuine focus on culture
Fred Armistead on Culture
Fred, thanks so much for coming on the Built by People podcast
Built by People With Fred
Topics covered
Organizations and entities mentioned
Full transcript
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