Why are we so bad at due diligence? Investment Funds, college choices, overpriced houses, buying companies. We just don’t seem to have the ability to look beyond the emotion and pressure of the transaction, the event, the decision to buy, and ask some pretty basic questions. Here is a tip that works for most buying decisions. Whatever the event is, whether its choosing a college (helping your kid make the correct decision) or buying a company — think about the first 100 days after the decision is made. Imagine that life post decision, in tiny details. How many acquirers really focus their due diligence around how they will run that company under their ownership. I mean a very detailed post acquisition plan, operational area by area, person by person. Until acquirers get better at post acquisition planning, due diligence will continue to be done badly. Until we force ourselves to imagine the implications of these material decisions in our lives, we will continue to make bad choices and the consequences are unreasonably important.
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