Diligence

We were sure, at first sight, that we could revolutionize everything. Every operation, every function, could be addressed by our suites of services and tools. Judging from their bottom line, the procedures and systems they had in place could only benefit from our expertise. We called this first assessment due diligence. Our financial presentation was a slam dunk and the deal was inked in March.

Week One

We put some of our promising junior execs over the three major divisions of the company and outlined an aggressive business process reengineering plan to stop the bleed and turn the P&L around quickly. Each division would be morphed into an identical extension of our corresponding existing business unit. Best practices would be implemented. Systems would be replaced. Organizational structure would be transformed.

In the first division the plan was presented to the second-tier managers, the legacy team, and problems arose immediately. They were unwilling or unable to grasp the newer systems and policies. They were hung up on trying to defend the way things were done in the past.

In the second division the management was more flexible, and system conversion planning proceeded aggressively.

In the third and smallest division our exec was getting a little distracted from the plan and immediately started hedging and asking for more time. Our corporate project managers assured us that the original plan was completely achievable. We tightened the screws on our exec a bit.

Week Four

In the first division, we started experiencing attrition in the second-tier management. Three long-term, top leaders resigned, incapable of change. The remainder continued to insist on challenging the plan, despite our assurance to them that we ran the same business at more than ten times their volume using the proposed strategies. Business Analysis consultants were hired.

In the second division, IT was holding up the conversions with technical issues of schemas and constraints. The manager assured us he could reign in IT and the plan would proceed with only minor slippage.

In the third division, our exec submitted a highly modified plan that was incompatible with the existing corporate strategies. He assured us that he could defend the new strategy and asked for two weeks to work with the second-tier management to develop a presentation. We informed corporate that we possibly had too weak an exec for the position and allowed the extra two weeks for the presentation.

Week Seven

The first division was in big trouble. The Business Analysts charged us an arm and a leg and then sided with the legacy management team in trashing our strategies. We realized that the Business Analysts needed a chance to see our organization in action in order to understand our proposed strategies and see an alternative and superior business model.

In division two, IT told us it would need eight months to develop, test and deploy the system changes needed to support the additional requirements of the new division. We hired outside consultants to validate their findings.

In division three our exec hit a home run. In the presentation he outlined several heretofore unknown differences between our existing business and this companies business. Some of the differences were substantial, and we realized this could explain some of the difficulties we were experiencing in the other two divisions. We handed the day-to-day operations of the third division to one of the legacy managers that our exec had come to trust implicitly and we tasked our exec to examine the ramifications of his discoveries for the other two divisions.

Month Seven

It's been six months since the acquisition and corporate is talking about divestiture of the new company. The business models are incompatible. The giant, expensive team of consultants is claiming the integration project will take at least two years and cost more than forty million dollars. Most of the adjustment would have to happen at corporate, not at the new company which, it turns out, has a cutting-edge set of systems and policies that corporate would do well to adopt.

I've learned so many lessons that will make my next due diligence project infinitely better, if I ever find another job.

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[peefer]

Don't worry. There are plenty of jobs in the Records Department within the Ministry of Truth. It can be a success story after all.