Due diligence tests whether a deal can be done, never whether its value survives the people who carry it.
Behavioural due diligence, holding the human side of a transaction to the same structured, directional standard as the numbers.
Location / capital-markets photographyEveryone in the deal world knows how mergers and acquisitions actually end. Between 70% and 90% of them fail to deliver the value that justified them, a figure so stable across decades of studies that it has become one of the few things the industry agrees on. When the post-mortems are written, the cause is rarely the model or the contract. It is the people: leaders who leave, authority that stops working in the new structure, client relationships that quietly dissolve, trust that never transfers, teams that disengage. Culture and people are named, study after study, among the biggest drivers of the shortfall. The knowledge is not in doubt.
What is strange is where that knowledge does, and does not, reach. Before a deal completes, the target is examined with real rigour: financial diligence tests the numbers, legal diligence the contracts, commercial diligence the market, operational diligence the platform, each producing a clear read a board can weigh. The one dimension everyone agrees decides the outcome, the people who carry the value, is the one the diligence process does not cover. When acquirers turn to it they reach for something different in kind: a culture review, a leadership assessment borrowed from change management or HR, an integration workshop. These run alongside the deal rather than inside the diligence, and they produce narrative and impression rather than a comparable read a decision could rest on.
- Interviewing
- Surveys & questionnaires
- Desk research
- Workshop facilitation
- Stakeholder validation
- Verification & triangulation
- Framework development
- Scenario & sensitivity analysis
- Investment risk analysis
- AI-assisted analysis
- Trend analysis
- Solution & mechanism design
- Governance design
- Recommendation & roadmap design
- Synthesis & report writing
- Executive & board-grade communication
- Knowledge-product & toolkit creation
- Tool & model building
Value moves through people. And mostly fails to arrive.
1 Global M&A deal value, Bain & Company (2024).
2 M&A deals announced worldwide each year, IMAA.
3 Conservative deal-failure estimate, CFA Institute (2024).
The dimension was never unmeasurable. The wrong question was being asked of it.
Assessed in the abstract, whether people are able, whether they get on, what the culture feels like, the human dimension genuinely is slippery, and it does not predict much. Two people who get on easily in a general setting can come apart once they are placed inside a new reporting line, a tighter governance regime and the pressure of an integration, while two who look an awkward fit can hold firm under exactly those conditions. General compatibility tells an acquirer almost nothing, which is why every attempt to assess it produced narrative, not the directional guidance a board or investor needs to make a decision.
The acquirer’s question was never general. It is specific, and it is about value: whether the value the deal is paying for will actually be extracted, preserved and, where the structure allows, amplified through this transaction, under this governance and this integration pressure. Framed that way, the problem changes shape. The task is no longer to score human character on a universal scale but to assess how identifiable, value-bearing people, and the interfaces between them, are likely to behave under a defined set of conditions, and that is a question that can be answered. Anchor the analysis to value and fix it to the concrete context of the deal, and the dimension everyone had written off becomes measurable. SABD is what happened when we built that discipline for the dimension that decides whether a deal works.
How we pulled it together
We broke the human dimension into things that can be scored, in context.
Behaviour stayed narrative because no one had said precisely what to assess, or what to assess it against. We defined both: the ways value concentrates in people and can leak away, the mirrored ways a new structure can release more of it, and the relationships value has to pass through, each a named category, and each read not in the abstract but under the specific structure, governance and pressure of the deal in hand. Stated that way the dimension can be scored, and once scored, compared from one person, one interface and one deal to the next.
We forced a position, not a description.
Even-numbered scales are used deliberately in both behavioural science and institutional investment, because a scale with no middle forces a real call, where people and models alike drift to the safe midpoint that tells a decision-maker nothing. The finding is well established, and it serves the whole point of the exercise: to hand a board a direction on each judgement rather than a hedge.
We looked for the upside, not only the downside.
Almost everything written about people in deals is defensive: who might leave and what might break. So we built the framework mirrored: every category of risk to value has a matching category of value the new structure could release, scored on the same scale. The same assessment that flags where a deal could lose value shows where it could make more.
We treated the individual as the unit and the relationship as the synthesis.
The person is where value is carried, so the person is the unit of assessment; value then passes between people, so the relationship is where the analysis comes together. The move that is new is symmetry: measuring not whether a relationship works but who is carrying it, since a relationship can read as stable while one side does most of the work of holding it up, a one-sided dependence that does not show until it fails.
We put the structure before the AI, not the other way round.
A language model asked to judge a deal from raw behaviour returns a fluent answer with nothing structured beneath it. We use AI inside the framework rather than in place of it: working on the defined categories and scales, it reads and compares behavioural and linguistic signals at scale and at speed, while the structure and the senior team hold the conclusion. Its role is consistency, not judgement.
What we delivered
Behavioural due diligence sits on a fault line between two disciplines that rarely meet in one person. One is the disciplined reading of people: assessing behaviour, authority and the way individuals actually work together, to a standard that holds up under scrutiny. The other is the discipline of institutional finance: knowing where value sits in a transaction, how structure and governance move it, and what a board needs to reach a decision. A framework that holds behaviour and value to the same rigour has to be built by people who own each side of that line.
Paul Gutteridge, co-founder of BlackCoral, carried the behavioural and linguistic analysis: trained by academics and by intelligence and law-enforcement operatives across the United States, United Kingdom and Middle East to read and assess behaviour in real time, and used extensively by intelligence agencies, he brings that reading of people to a rigorous, repeatable standard. Thierry Clarke carried the transaction and value discipline, drawn from years inside institutional investment management, where the structured, directional assessment at the heart of SABD is how serious analysis has always been done.
Neither half is behavioural due diligence on its own. The framework works because each side was built by a specialist in it, and both were held to one standard.
Paul Gutteridge
Thierry Clarke
