Start Now To Improve Your Company’s Chance of Success
Don’t worry if the words “Due Diligence” don’t fill you or your colleagues with excitement, as most people are “normal” just like you. I’m probably one of the few folks who perks up when I hear the phrase.
Let me help you understand how a little background research can be incredibly powerful for your business outlook and you’ll never make important decisions without Due Diligence again.
Due Diligence carries a lot of legal overtones in most people’s minds and for good reason. Legal professionals routinely go through the discovery process, research the law and research earlier court cases to better understand the playing field. That is how they protect their client’s interests (or decide whether to take them on in the first place).
The problem is that many people would rather sleep on a bed of nails than perform Due Diligence. Ironically, it may be more about the label because the results can be very satisfying. Let’s just substitute “research” for “due diligence” for the rest of this post and see what we learn. A few typical examples from your personal life:
• Comparing credit cards for interest rates or late fees.
• Checking homes and prices in the area where you would like to buy. Is it in the flight path of the local airport? Does it look like it’s in an economically declining area? Can you afford it?
• Preparing for a car purchase by studying horsepower, mileage, the number of doors, maybe even how close the dealer is to your house.
• Learning about car seats or cribs for your soon-to-be first child.
• Researching P/E ratios and company history for an upcoming stock purchase.
• Comparing the food information labels on two similar products in the grocery store.
If we do all this research for our personal decision making, why do many business skip this step in their major decisions? In my experience, I find that too many businesses simply don’t appreciate how an extra layer of knowledge can be helpful or are not sure how to use research in various situations.
Much like buying socks, research is not sexy, but the results can head off daily pain and situations that just rub you the wrong way.
Some basic research can mean is that you’ll be the one with statistically better chances for success, smaller chances of failure and better chances for each project to be a win rather than a loss.
Friends, the odds are daunting: 65 percent of new products fail for established companies and 90 percent of new products fail at startups. [1]
Whether you are an R&D Director, Director of Engineering, IP Attorney or Marketing Director, you should be exploring ALL of the following questions regardless of your title. And by exploring, I mean research that goes beyond water cooler chit chat and speculation.
• Is there a market for that idea?
• Are there any existing patents or other Intellectual Property that should be discovered and considered? (The answer is almost always “yes.”)
• What market opportunities are being overlooked, especially those outside of your industry?
• Is this idea patentable?
• Should this idea be patented, even if it is novel?
• Will the market for this idea be around in a few years?
Sure, you run the risk of being typecast as the wet blanket asking “So, have you done any due diligence yet?”
The upside is that colleagues will eventually learn that they should have a ready answer *before* they talk with you. After all, who wants to be in a meeting and have a simple question like this come up without having some facts at hand?
It can seem counterproductive to slow the exciting idea train down, but isn’t it good to know whether there’s a successful depot just down the tracks? Yes, you may take some heat as the one who rains on everyone’s new ideas but eventually, you’ll be the hero for saving your company money, having a greater frequency of successes, and fewer product flops.
Graphic: smatch (Dollar Photo)
[1] “If You Build It Will They Come: Three Steps to Test and Validate Any Market Opportunity,” Rob Adams (2010)
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