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Checklists for Private Company Research

Magazine article Online

Checklists for Private Company Research

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Business research is more complex than ever, and simplification doesn't seem to be in our future. The expanding number of resources is a mixed blessing. With additional possibilities for sources to check and search engines to try out comes the inability to remember them all. It's too easy to overlook a critical research tool, to follow one research trail while ignoring another, and to not deliver a fully correct, entirely comprehensive answer due to ignorance of an important website.

Even with the requisite knowledge of relevant information resources, time pressure can lead researchers to miss a step in their research processes. We're in such a hurry to meet a critical deadline that we skip over a website or database, assuming it won't contain additional information. That could be a significant error, contributing to a flawed research project and derailing important business decisions.

In The Checklist Manifesto: How to Get Things Right (New York: Henry Holt and Co., LLC, 2009), Atul Gawande makes the case for a checklist approach, not only in his own field of medicine (Gawande is a surgeon) but also in others. He tells stories about checklists in hospitals--from emergency rooms, intensive care units, and surgical theaters to routine rounds. That is obviously the milieu he knows best.

However, he also investigates how checklists can improve performance and prevent disasters in other arenas. If you've ever watched a pilot walk around a plane before passengers are allowed onboard, you've watched part of a checklist in action. Construction workers who build office buildings, bridges, and homes follow procedures that resemble checklists. The chefs of even the poshest of restaurants, not to mention assembly line workers in fast-food places, use a checklist to make sure meals are created in the proper order and nothing is omitted from the plate. The checklist approach can also forestall hasty or emotional investment decisions.


Checklists are written guides that include key steps for complex procedures. Gawande says, "Good checklists ... are efficient, to the point, and easy to use even in the most difficult situations. They do not try to spell out everything. ..." Checklists make you smarter and ensure that you get critical information in a systematic fashion.

Most of his examples involve teamwork. This will be appropriate in some business research settings, but not all. If you are the only online researcher in your organization, your checklist will be more personal than if you have multiple people contributing to the research effort.

Gawande also stresses that checklists aren't intended to be "comprehensive how-to guides." Instead, he sees checklists as "quick and simple tools aimed to buttress the skills of expert professionals." They also aren't set in stone. Say you have a research checklist, and one of the resources changes character, disappears, or is not renewed. You should immediately remove this source from your checklist.

From a business research viewpoint, I was particularly intrigued by Gawande's depiction of what might be on an investor's checklist. One point was to check whether a company's revenues "might be overstated or understated due to boom or bust conditions." Another point was to review key financial statements over the past 10 years to give perspective beyond the most current year. Read the footnotes to the cash flow statements. Look at management's identification of key risks. Do cash flow and costs align with reported revenue growth? Review stock sale disclosures to see if key officers are buying or selling their company's stock.


How might a checklist work when researching private companies? Those pesky private companies are a recurring thorn in the side of business researchers. I've written about the process before ("The Perennial Problem of Private Company Research," ONLINE, September/October 2005, pp. …

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