The What and the Who of Due Diligence
Due diligence is the process of exploring your options. By exploring the facts of your potential decision in a strategic way, you make decisions based in reality and facts, not just hopes and dreams. Your hopes and dreams have a larger chance of becoming reality when they’re supported by the facts and figures to move them from dream to reality.
You need the right people on your team when performing due diligence. They need to understand your WHY, while also being willing to challenge you and ask hard questions. They should want the same outcome, but see things from a different perspective.
I am a big picture thinker. I need others who love dealing with the details on my team for due diligence so I am aware of potential pitfalls. This allows me to either plan for them or find another option that works both in the big picture and the nitty gritty of every day.
Due Diligence in Real Life
Here’s an example of being saved from a terrible decision by a team member discovering something the leader didn’t know how to see. A friend was looking for a business to buy. He was deep into the process of buying the business. He’d even put his house on the market in anticipation of moving to a different city to run the business.
Fortunately for him, the accountant he was working with recognized that the books were falsified. The great business it looked like he was buying was not in reality what it appeared to be. Because of the due diligence process, he was able to make a smart decision – backing out of the deal – and can now find a better option to reach his goal of business ownership.
Performing due diligence helps reduce risk. You move toward the upside potential as you explore the facts and figures of the opportunity you are considering. Strategic direction and action based on what you learn in your due diligence helps you develop the best plans to take smart risks and reach your goals.
Who do you need on your team to accomplish your due diligence? How will due diligence help you build your organization in support of your WHY?