
What is it? It’s an evaluation of the leadership team within an organisation that looks at their effectiveness and ability to meet key objectives and/or the organisation’s goals. It can also look at the relationship between leaders and their people, as well as with their peers.
Why do it? It gives a real time snap-shot of how individuals and teams are performing by highlighting the things that are being done well and that are productive, but also showing the areas where improvements or changes are needed.
Many leaders cannot be objective or critical enough to understand where the problems or improvement areas might be, especially if that means taking a critical look at themselves. An independent review of how an individual or team is functioning gives critical insights and the ability to alter course if needed.
It allows a company to make changes or bring in additional support or roles to meet key objectives. If you are evaluating a business to invest in or acquire, a MDD process is essential as part of the overall due diligence process.
How does it work? The process is flexible depending on the organisation and its configuration but typically it follows a set process that includes:
Initial fact finding: through observation, discussions, face-to-face meetings, surveys/questionnaires and other data.
Reviewing the information: analysing and appraising the information gathered and received in order to understand the fundamentals, areas of concern, or inconsistencies. Requesting further information if required.
Reporting/sharing findings: production of reports or feedback forms that show the current standing and risks/weaknesses/areas of improvement. This can also include recommendations on future strategy and changes or appointments needed.
How much does it cost and how long does it take? This is dependent on the task at hand and who you choose to do it. What is important is that whatever and whoever you choose, you don’t lose the opportunity to make improvements or capitalise on the opportunity to change. Getting it wrong can set back not just this process, but also future changes or processes you want to initiate within the organisation. We can typically provide feedback in initial findings within days (hours in some cases) and normally report within a week or two depending on the data set available and cooperation with the organisation and specific people. We are also extremely sensitive to the nature of our work and therefore any evaluation process is carefully planned.
Getting the right person or team in is critical. The cost for doing so varies enormously. For Management Due Diligence, consultants and companies might charge between £1,000 and £3,000+ a day/consultant. Add in a lawyer or accountant on top and these costs can easily escalate. If you get the right team in (ideally people with experience of working in the type of organisation they are evaluating or at least have a broad experience of various different types of organisations and people) then it’s a worthwhile investment if done correctly.
You cannot grow if you do not know: charging off in any direction of travel without first knowing your starting point is foolhardy. Understanding your strengths and weaknesses (or indeed those of any business or organisation you wish to purchase or acquire) is essential.
To find out more or if you have any general queries, get in touch.
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