“…and finally we would like three reference persons that we can contact…”
The sentence above is familiar to many of us from various recruitment processes and most of us probably don’t find it difficult to come up with three friends or colleagues we trust and who we know will speak to our strengths. Possibly with some harmless development need that really won’t stand in the way.
It gets a little bit more challenging if the recruiter is specific about which people he or she wants to speak to, but a candidate would rarely suggest a reference that would risk him or her the job.
In practice, this results in a challenge for the prospective employer or business partner of the candidate: do you really get the whole picture of the person? Will you have all relevant information?
Look Closer offers another type of reference taking - Discreet Enquiries. This service has many similarities to classic reference taking, but provides greater value and better understanding. Specifically in the case of M&A and long-term strategic collaborations, Discreet Enquiries can be crucial in providing a complete basis for decision-making. However, also when recruiting key management and new board members, this service provides the client a better foundation on which to make important decisions.
The obvious difference, compared to traditional reference taking, is that we - and not the candidate/executive - decide who we interview. We go to great lengths to identify the persons we believe may have relevant information to share.
Another key difference is the scope. Instead of interviewing the three standard references, we often interview more than ten people and can therefore both calibrate for ”extreme values" and get a more multi-facetted picture. Another value-adding and differentiating factor is that our reference persons are anonymous - both to the person being reviewed and to our client.
We have extensive experience in this space and see a growing demand from our clients to include Discreet Enquiries in our scope.
Open Source and Discreet Enquiries
As a person, colleague and leader, we all leave traces and the imprints turn into a summary of our successes and our missteps. Many of these traces can be found in the public domain - posts in social media world, letters to authorities and corporate engagements are all examples of things available for others to analyse.
The review and analysis of the public footprint is the foundation for Integrity Due Diligence and has saved many investors from doing business with the wrong people.
But there is also information that not necessarily can be found in the public domain. Matters that can be identified only by speaking with the few individuals who were there when it happened and who can provide nuance to the picture and increase understanding of a key person. By viewing someone through the lens of other people’s perspective, deeper insight can be found.
The combination of open source analysis and Discreet Enquiries provides a very good understanding of the persons relevant to the transaction.
The Craft
Interviewing someone is a skill. In addition to having social skills and the competence to ask the right questions, a sense of nuance is required. Identifying the short hesitation, the slightly too long pause or a sudden change in tone provides the interviewer important clues for the conversation.
Identifying sources is key to understanding. Former employees often form a good foundation. Since they have left, they can speak freely "from a distance”, and they often have first-hand insight into the conduct and morals of the persons of interest.
Examples of other relevant sources are business partners such as suppliers and customers who can share their experience of working with the persons we are interested in.
In some cases, there might be local journalists or industry specialists who have followed persons for a long time and have good insight. In other cases, we interview local politicians or authority representatives.
Discretion and Honesty
Discretion is both a keyword and a prerequisite for our work. In some cases, confidentiality is regulated by law (e.g. in the case of insider transactions), but above all it stems from respect for our clients and the persons our client wants to do business with. Discretion also applies to those we interview. This is why we don't disclose to anyone - not even our clients - who our sources are.
Another keyword when dealing with Discreet Enquiries is honesty. When asking someone to share their experience, this trust must be reflected with respect and honesty. Unfortunately, this is not always the case in the industry, where there are countless examples of interviewers pretending to be someone else - e.g. a recruiter or a journalist. When we reach out to someone we are always honest about who we are. We do not lie, but are at the same time transparent about the fact that we cannot share the exact purpose of the questions or who our client is.
We Give Advice
With our vast experience we are able to advise our clients on when it may be appropriate to include Discreet Enquiries. If you want to know more about this service and about how you can make better and safer business decisions you can contact us here.
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