Don't overestimate your awareness

“Every beginning has an end ... ” Santosh Kalwar

Commit yourself to your words, keep your promises and be respected. Play with words, justify your promises and be known for doing so. In which case will someone feel nervous because of “due diligence”?

Reputational, financial, legal and other risks are imminent if a company doesn’t perform due diligence on their business partners, on a company they would like to merge with, or to acquire, on a new stakeholder in their industry or supply chain, and so forth.

Those who have something to hide see due diligence as a negative procedure, as it can uncover the nature of their business to potential business partners.

In a reverse: if you feel that something is wrong with your potential business partner...take your time to investigate...independently from how tempting the deal might look like.

Those who are fully confident in their business don’t fear due diligence and do it themselves on a regular basis for different purposes. Although sometimes they feel that it is an unnecessary procedure as they are sure that they have all the right information to make a proper judgement, and if this is the case, due diligence can be done slipshod. How many of us have heard bad stories about runaway bankers, financial frauds, failed M&A’s, and so forth? If mature businesses make mistakes...

Why those mistakes keep happening over and over again: overestimated feeling of security? overestimated awareness? negligence?

Due diligence is really a good tool which should be used by every company independently of their size and independently of how well they think they know their potential partners, future employees, new stakeholders, etc.

A common mistake lies within perception and awareness. Big companies are used to doing due diligence as, in general, the management machine comprises at least a few people but mistakes are still happening...

Small companies (when management is usually only a small number of people or even only one person) tend to overestimate their awareness as well and very often they make decisions on the basis of their perception that can be backed up by only minimal data, or on the basis of temptation to make a quick win.

Not everything that seems an easy or logical choice or the only solution is necessarily the solution which leads to freedom, success and contentment. However same words can be applied to everything... 

In every beginning think of the end.

Disclaimer: All statements and opinions that are posted on this account are personal and do not represent the official position of IOGP.