How Extended DISC® Assessments Strengthen the Due Diligence Process
Extended DISC® and FinxS assessments have a strong commercial focus and are used by business consultants across a wide range of applications, including the due diligence process. Despite this, many professionals still overlook the importance of assessing people during due diligence, particularly when the founder of the business is leaving after the sale. Since the founder is often central to the organisation’s success, understanding the behavioural styles of those who remain becomes even more critical.
When a new manager is set to take over, the need to understand how individuals communicate, how they listen, what motivates them, and which tasks they naturally avoid becomes essential. These insights, along with understanding development areas and emotional pressures such as stress or insecurity, are vital for building and maintaining an effective team. Without this information at the outset, it can take weeks or months to understand how people operate, what drives them, and what may hinder their performance.
In some situations, a behavioural report alone may not be enough. This has led to an increased use of Open 360 Assessments to complement the process and provide a more complete picture.
When People Are Ignored in Due Diligence
A past case highlighted the cost of overlooking the people side of due diligence. A large overseas organisation purchased a company with the help of an accounting firm. The firm focused strictly on financial data and paid no attention to the personnel responsible for running the company after the founder retired.
The founder had a strong competitive and somewhat aggressive style. His leadership approach suppressed several departmental managers who reported to him. When he left, the new owners appointed a general manager from within the company based solely on seniority. This decision became the first of many mistakes.
The newly appointed general manager lacked genuine management experience and struggled emotionally with the role. Believing he needed to mimic the aggressive style of the founder, he attempted to adopt behaviours that were completely outside his natural comfort zone.
The “diamond” taken from his report soon after his appointment is shown opposite. The dark shading is his natural unconscious style and the end of the arrow his “perceived need to adjust”.
The impact was immediate. His forced behavioural adjustment created tension within the organisation. Managers who had previously worked alongside him as peers felt confused by his sudden change in approach. Communication began to break down, creating friction and reducing overall effectiveness.
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Uncovering Hidden Issues After the Damage Was Done
Recognising the need for intervention, the new owners appointed a consultant. She obtained Extended DISC® behavioural assessments from all staff and Open 360 feedback for the management team. The findings were concerning.
Even before the sale, several employees were working in roles that did not align with their natural behavioural styles. Many were experiencing stress and pressure. The founder’s dominant style had created emotional strain, and the new general manager’s forced behaviours intensified these issues. Communication deteriorated further, and team performance continued to decline.
The consultant recommended replacing the general manager and restructuring the responsibilities of several departments. This included new appointments and renegotiating recently signed employment contracts. As a result, the new owners faced significant unplanned costs, including legal fees, new recruitment expenses, and consulting costs.
How the Situation Could Have Been Prevented
All of these problems could have been avoided if behavioural assessments had been included in the due diligence process. Understanding the natural behavioural styles of key staff would have revealed the misalignment, the suppressed issues caused by the founder’s style, and the emotional strain already impacting the team.
Addressing these concerns prior to signing new employment contracts could have prevented costly decisions and may have influenced the final purchase price.
Behavioural due diligence is not optional. It is a crucial step that protects the investment, ensures smoother transitions, and helps maintain an effective workforce.
Want to Strengthen Your Due Diligence Process?
Use Extended DISC® assessments to uncover behavioural risks early and protect your investment with clearer insights into people and team dynamics.
