Comments on: 7 Tips for Conducting Better Due Diligence

By: Justin Hibbard

Justin Hibbard — Mon, 29 Sep 2008 20:07:55 +0000

The due diligence practices I describe in this article would have prevented, not caused, the HP scandal. To begin with, HP’s legal department should have informed all of the board members from the beginning that an investigation was underway. And obviously, the PIs should have refused to render any illegal or quasi-legal services. Nevertheless, no one should hire an unlicensed investigator or consultant to perform investigative services, even if you are sure that the services are legal. Conducting investigations for pay without a license is illegal in most states. Most PIs are competent and ethical, and many state licensing boards have web sites for verifying PI licenses and checking disciplinary history. For example: http://www2.dca.ca.gov/pls/wllpub/wllqryna$lcev2.startup?p_qte_code=PI&p_qte_pgm_code=2420

By: dave

dave — Mon, 29 Sep 2008 15:14:52 +0000

i’ve been involved in a number of dd projects and all have been conducted in a reasonably open manner. more often than not, there is a strong focus on examining all operators (key people) and with technology, a hard dig into any black box magic and technology….if it’s of interest, i’ve written about this particular subject before for “competitive intelligence magazine” (articles are up at my corporate site, including ’sizing up talent in a deal’ and others)

i’m not always certain that a PI is most suitable for business research of any kind, though your own background lends itself well…the licensure rings of HP scandal and potential gumshoe approaches that violate business ethics and guidelines, but that’s a broad and sweeping generalization…

By: Mike Sellers

Mike Sellers — Mon, 29 Sep 2008 14:03:07 +0000

Good points.

In #6, I'm pretty sure you mean the Hawthorne Effect, not the Heisenberg Principle. That latter one would say that when visiting someone's office for a first-hand look, you'd know where they are, but not what they're doing. ;-)

By: Matthew Barney

Matthew Barney — Mon, 29 Sep 2008 03:27:13 +0000

Your points are well taken - caveat buyer, seller and lender alike. I would also suggest that effective "Leadership Due Diligence" includes an evidence-based approach to assessing prospective people who are to run or lead a going concern.

There is substantial evidence, over the last 50 years, about what factors predict effective leadership, particularly around the "Full Range" leadership model of Bass and Avolio. There are also better ways to synthesize your decision making, using modern measurement (Rasch or Item Response Theory).

Matt

By: Psycuity - Building Great Teams » Blog Archive » 7 tips for conducting better due diligence

Sun, 28 Sep 2008 19:52:19 +0000

[...] has a post on 7 tips for conducting better due diligence one of the tips caught my [...]