Due diligence projects are hugely instrumental for the growth of your company. Unsure if you are executing your due diligence projects correctly? Read on for some best practices to ensure you get a clean and fast start.


Many of you work for Private Equity owned portfolio companies and have been through due diligence projects.  As we’ve seen, many of these are now identifying levers for growth, and CEOs need to understand how to take these levers and execute quickly on each.  In this article, I want to share some emerging best practices to ensure you get a fast start. 


Mitigate and assess the risks of starting up a due diligence project by leveraging our Risk Assessment Worksheet.


Before we get to the steps, let’s make sure we are set on what I mean by a recommendation or lever.  For something to be considered, it must be quantified with data.



You shouldn’t consider a recommendation that states, “You need to make your sales reps more productive.”  That’s too vague.  If you are going to look at that recommendation, build out the revenue impact that gives you measurement.


In the example above, here is how I would quantify.  We can increase selling time by 4% across the inside sales team.  This will equate to every sales rep selling one more deal a month. The overall result is an additional $500K in bookings per quarter.  Based on the data, you can now prioritize the lever against others.  But that’s just one part of how you create value.  You need to consider three other key steps in your decision-making process.  They include the following:


  1. Create the Roadmap of Recommendations and Dependencies


  2. Understand the Level of Effort


  3. Identify Risks and their Mitigation Plan


For more on improving your sales team, leverage our podcast titled, “Improve the Productivity Rates of Your Sales Team.”


When reviewing the levers, you will naturally want to rank them on impact to revenue or EBIDTA.  This is the correct approach, but you need to consider the timing of other strategic initiatives within your organization.  For instance, you may have uncovered pricing as a growth lever.  The product strategy and any product launches must be considered on when to roll out any price changes.  You don’t want to launch a new product to the market and then go back in a quarter and change prices.


Another example may involve customer success.  As you think about implementing a dedicated team, you must consider all the customer touchpoints that are dependent on the input and output of customer success.  Map out the dependencies prior, to identify areas where you may have a gap or an overlap in responsibility. I’ve seen too many CEOs have a great idea coming out of diligence and “rush to get it going.”  There needs to be a defined roadmap with dependencies identified across the organization.


The second item to consider is Level of Effort (LOE).  In this step, you need to consider the effort needed to implement the recommendations coming out of diligence.  Measure the impact across these three areas in detail when determining the LOE:


  1. Process– Is a new process needed or will an update of an existing one be sufficient? Map out the process and see its complexity.


  2. Technology– Too many times we’ve seen technology as the answer to “all your problems”. The reality is you need to understand what the process should be BEFORE putting in the technology.  Take the time to evaluate what you have and then decide if it’s “good enough” go get started. You may be surprised that  you have what you need to get started.


  3. Culture– This is the most important item to consider. If the effort to implement is going to destroy your existing culture, you need to measure the trade-off.  It’s okay to push the organization to change, but not accounting for culture can delay your progress. Look at the effort of change across the culture of your organization before implementing.


The third area to review coming out of a due diligence project is Risk.



In this step, you should analyze through four lenses: Execution, Operational, Financial and Talent.  For each risk, document how each may impact the recommendation.  Then determine what the mitigation plan is to reduce or eliminate the risk and who owns it.  To help you get started, I’ve created a Risk Assessment Worksheet that you can download.


Going through a Due Diligence process can be stressful, but also breathe life into an organization that is about to accelerate growth.  Take the time to build a plan that not only aligns you to the Private Equity firm, but also to your leadership that must go and execute the recommendations. 


Good luck on the journey.




Additional Resource


For additional help evaluating your Revenue Growth strategies, click here to download SBI’s mobile app.  


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Josh Horstmann

Brings a deep level of experience and insight in helping organizations develop and execute their corporate, sales and marketing strategies.

Josh specializes in helping clients solve demanding sales and marketing challenges through aligning functional strategies within an organization. He has worked with clients in manufacturing, ecommerce, software, financial services and technology sectors.


Recently he helped transform an international services company ‘go to market’ strategy, which included assessing talent, re-organizing the sales force, increasing team productivity, reducing the cost of sale and aligning the marketing and sales strategies.


Josh continues to provide thought leadership to his clients advising them on how to build inside sales teams, develop compensation programs, share best practices on social selling, transform sales organizations, drive demand generation programs and acquire and cultivate talent. Along with this he helps organizations align functional strategies.


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