Many people see due diligence as a formal process of checking documents toward the end of the acquisition process. The traditional functions of due diligence in company acquisitions have included:
1) Evaluating strengths and weaknesses
2) Uncovering liabilities
3) Renegotiating based on findings
4) Checking the boxes and filling in the blanks
All of these functions remain perfectly valid. However, I have found that the conventional approach to due diligence is largely inadequate. Too often, those responsible merely focus on completing a checklist that has been handed to them. I advocate new thinking that makes due diligence an integral part of the entire acquisition process—beginning way back when you develop your initial strategic plan. Looked at in this way, due diligence becomes as an opportunity rather than a chore.