There’s an old saying that ‘knowledge is power.’ In this digital age, it’s easy to see why data is considered the best knowledge we have. Data is central to doing business and the belief is that we ignore it – or underuse it – at our peril.
However, relying on analytical data alone to make a success of due diligence is missing the boat. The pandemic and geopolitical shifts call the quality and validity of data into question, and while it will improve, with so much change in society and business, we must hit the road and observe!
Getting Out There
Analytical data might be all-powerful, but at the true heart of business is relationships. The experiential engagement that comes with face-to-face meetings can’t be beaten. It’s still research, just done in a different way.
“Analytical data can’t predict the human factor.”
Getting out there, gathering fresh and compelling empirical evidence – meeting the right people, viewing sites, checking out the geography/surroundings – can prevent future roadblocks and inform the overall strategy.
All too often, corporate location strategy business cases are rejected by Boards because the plans are limited or, worse, are passed only to find a glaring issue once it’s too late – for instances, moving into a new HQ only to find a competitor is planning to locate next door. Analytical data can’t predict the human factor.
At a site visit, leaders can qualify their solution and find out the anecdotal facts that aren’t in the analytical data, but can easily change a decision by, simply, connecting with the team – asking the tough questions, sharing a meal and chatting about their world.
Analytical data tells a part of the story and is critical to support decision making, but when it comes to confidence and certainty in the Boardroom, nothing beats being able to say, “I’ve been there, talked to people. I’ve smelled it. Kicked it. Felt it.”
It’s empirical research and it’s the ‘ground truth’ of any corporate location strategy business case.
The ‘Rough Diamonds’ Scenario
The ‘rough diamonds’ scenario – discovering new, exciting options made available during a site visit – illustrates the power of empirical research perfectly.
A Request for Information (RFI) is broad and impersonal, and inquiries will receive an informative yet standard response. By taking the time to travel, meeting someone and doing empirical research, you will build relationships. Often, the person on the ground will present other options, the ones they held back until they checked you out too! Those they save for the best opportunities.
Of course, analytical data must not be devalued, but there’s more to successful due diligence than just crunching numbers. Achieve the balance between data science, analytics and empirical findings and you’ll have the project that sails through the Boardroom and becomes a reality much more quickly.
There have been times that several project scenarios were ranked, then tested on location. Based on what we see, hear and experience – the location data that is gathered – these scenarios often get reordered or re-prioritized, not the intention of that decision-making moment.
Working empirically leads to further questions and means the chemistry of relationships becomes important. People are more open and honest once they know they can trust you.
Some of these skills are getting lost as we focus more on analytics, however you cannot over-value being able to connect with multiple stakeholders, build trust, and influence people’s thinking, especially their critical thinking and inspire “what if” conversations. These are softer skills but they add up to hard business decisions.
Key Takeaways for Successful Due Diligence
There are three partners that need to come together to create the perfect scenario for successful due diligence:
The community – finding the right locations to consider in the first place, wide and varied they can be, to find out which one’s stand up to scrutiny
The company – knowing their needs and desires, both financial (bottom line always) and non-financial (conditions for investment), and them having an open mind to consider what you discover
The consultant – Identifying the right people to talk to is doing the hard work, then investing in more efficient and prioritized solutions, and relationship-driven business opportunities
Ultimately, this recipe creates confidence and certainty in the Boardroom, at a time when there’s very little of it in the outside world.
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