DD call gone bad

Originally published: January 2024

In a due diligence (DD) process, the adviser tries to find out problems with a business, mostly by asking management. Management knows the business intimately, but they have an interest for the business to look good, creating an obvious conflict of interest. You might think it’s a good idea to put the pressure on management, do a good cop-bad cop routine or at least make them feel slightly ill at ease. But that’s generally a bad idea. Management can smell hostility a mile away and they will become difficult about all information, including mundane, harmless, bland topics. Good luck writing an informative DD report after that.

This playlist illustrates how a DD call could go bad quickly (https://lnkd.in/eauDege8).

As mentioned, a bad DD call starts with distrust (“We’ll Find Out” (Timber Timbre), “I’m Not Calling You A Liar, just don’t lie to me” (Florence + the Machine), “I Know There’s Something Going On”(Frida)), leading to Trust Issues (NSG) and appeals to “Be Honest” (Jorja Smith) and “Believe Me/What I Say” (Lil Wayne/Kanye West).

After we get DD Form 214 (JPEGMAFIA) out of the way, attempts to “Reveal The Truth” (Natty Wailer) trigger a counter reaction as management considers the call “Time To Pretend” (MGMT), applying a new “Policy Of Truth” (Depeche Mode), a mindset of “it’s true if you believe it” (Kae Tempest) and even “Don’t Tell ‘Em” (Jeremih). Cynicism reigns high now, as “Everybody Knows the dice is loaded” (Sigrid in a Leonard Cohen cover) and management acting like “the Great Pretender” (the Platters).

But the DD adviser has “Seen That Movie Too” (Elton John) and doesn’t know if they “Believe” (Mumford & Sons). They are not “Fooled So Easily” (UB40). “You can only Fool Yourself for so long” (Chase & Status) until the DD adviser proclaims “I Found Out” (John Lennon) and considers Target management as the “Devil In Disguise” (Elvis Presley). More moral judgement comes from Johnny Cash and Blind Willie McTell, but Tom Waits wants you to “Lie To Me”. Condemnation of management’s supposed lies continues in Spanish by Kumbia Queers, La Dame Blanche, Caña Brava and Manu Chao.

At the debrief, both sides decide they “Won’t Get Fooled Again” (the Who). Doing DD is really about Karma (Taylor Swift knows, as I explained before (https://lnkd.in/e2Ni3-xM)). A better way to approach a DD is to “Have A Little Faith In Me” (John Hiatt) and “Tell It Like It Is” (Aaron Neville). After a good DD interview, management should be able to say “If You Don’t Know Me By Now, you will never ever know me” (Harold Melvin & the Blue Notes) and they have said as much they know to be “True” (Spandau Ballet). But if they’re a “Vuile Huichelaar” (Renée de Haan), they should just pack their bags.

Obvious disclaimers: this is not advice. These views are my own and do not necessarily represent my employer.

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