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The EDEM Scorecard ®

If you Google “people problems in m&a” then the response will be Communication, Employee Retention and Cultural Differences.  And to quote Deborah Pikula (Queens University) “knowing the differences in the two organizations involved in a merger or acquisition and how they are managed are crucial to the success or failure of the process”.

So, during the due diligence phase it is essential to assess those differences… and the similarities.  Then we can communicate effectively from a very early stage, anticipating the concerns, reducing the rumours, alleviating anxiety and helping both companies to maintain a “business as usual” attitude through the process. Also, merging the best of both will create a common set of approaches that both organisations can relate to.

The EDEM Scorecard® can be used to help in the initial assessment.  It consists of four areas to assess and within each area there are seven topics for discussion

The EDEM Scorecard® will help to complement, enhance and support the non-financial due diligence process.  It could be another “below the waterline” section of:

• ENVIRONMENT: tools, colleagues, surveys & management
• DEVELOPMENT: training, certifications, promotions & succession
• EMPLOYMENT: benefits, processes, values & support
• MEASUREMENT: role definition, performance metrics & recognition

Let’s look at a couple of examples:

  1. Complete mismatch

It’s easy to see from the above that the two organisations are not aligned and that there will be difficulties with employee retention and culture mix in the acquired company, no matter how much communication is carried out.

  1. Similar with some differences

From this assessment we could recommend that they look to use:

–       Communication plans from Company B

–       Employee Surveys from Company B

–       Promotions Process from Company B

–       Onboarding Process from Company B


Start the Business Change planning early with an EDEM Scorecard® review of the Organisational differences and similarities during the due diligence phase.  Then :

–       incorporate organisation culture into the change planning

–       assign a team to blend the similarities (e.g. job descriptions, recognition schemes, employee surveys)

–       communicate, keep everyone informed

–       ensure everyone can relate to the new ways of working

–       enable everyone to use any new/different processes and systems

Continue the growth of the new organisation culture by incorporating an employee engagement plan and implementing any new practices that may be missing from both organisations.

The EDEM Scorecard® – it plays a vital role in non-financial due diligence.

This article was written by Trevor Pullen, a veteran of hp and M&A business change management specialist

Trevor is also an Associate of TRUEDIL and a member of the IBD network