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
Eversana was built from seven acquired companies in a single transaction. The normal playbook for that kind of deal is to resolve the cultural clashes over time, after the financials close. Fred Skinner and Eversana's leadership did it the other way around—they started with culture and let everything else follow.
Six consecutive years as a "Great Place to Work" certified organization later, the results speak for themselves. Skinner, who grew up in talent management before being tapped for the CHRO role, attributes Eversana's performance to a deceptively simple framework: three key results (employee engagement, client delight, financial outcomes) and a set of culture beliefs that govern how people behave across all of them. The logic is direct: happy employees create happy clients, and the financials follow. What makes this framework durable across 9 years of rapid global expansion is that Skinner ties compensation directly to those culture beliefs—something he says many organizations are "afraid to do," but that creates the alignment between stated values and actual behavior.
His most contrarian move: designing the organization for the 99% rather than the 1%. Instead of building bureaucracy to manage rare rule-breakers, Eversana leads with trust—hiring talented people and getting out of their way. Communication is a named cultural belief, not a quarterly initiative. And the most important lesson from rapid growth? "You can't fake a genuine focus on culture. People can read through that."
- Culture-first M&A due diligence: why Eversana evaluates cultural fit before financial considerations in acquisitions
- The three-key-results framework linking employee engagement → client delight → financial outcomes
- Tying compensation to culture beliefs—the practice most organizations are afraid to implement
- Designing for the 99%: building high-trust, low-bureaucracy organizations that empower high performers
- Communication as a cultural belief, not a program—and why it's the easiest lesson to miss during rapid growth
- Why authenticity in culture-building can't be faked—and what happens to organizations that try
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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
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