Only by Controlling the Details Can You Avoid Being Fooled

People from PE funds say the same thing to me: you really pay attention to details. Most of them assume it is a personality trait, that I am simply wired that way. It is not. It is because only by controlling the details can you avoid being fooled.

Sitting in a conference room listening to macro logic, everyone describes a business model that holds together perfectly, because on the big picture there is no standard answer. Say it any way you like and it still sounds coherent. But the moment you push the question down to the execution layer and ask how one specific thing was actually handled, most people are lost on the spot.

Big picture questions are the easiest to fudge. The person answering has a polished script ready and waiting. Stay on the highway and all you will ever get back is a public relations answer.

Interviewing a finance manager, I never ask about a high level financial model. I ask one question: how are the auxiliary accounting dimensions set up. Interviewing a production manager, I do not listen to him recite the slogans of lean manufacturing. I ask him how returned material is handled.

Interviewing sales operations, I do not ask about market growth strategy. I ask whether churn is calculated on contract value or on customer count, and how the framework agreements get booked for amount. Interviewing a service manager, I skip team building and customer satisfaction metrics. I ask how many hours of effective on site service time his people deliver per day on average, and what share of work orders are emergency callouts.

Once you push someone to that level of granularity, the most common reaction is a laugh and a wave of the hand. This situation is too complicated, they say, we will not get into it here.

Any matter that has a definite, objective answer will come back in different words from different people. That is the most direct litmus test there is. Ask people at different levels and in different roles inside the same organization, and the big picture strategic line is usually uniform down to the syllable. Push down to specific questions and the answers shatter immediately.

Being specific, though, is not the same as being effective. Detail is not a matter of more being better, because specificity often means tedium. Plenty of people look like they are asking very concrete questions while accomplishing nothing at all, circling inside unimportant fragments without touching the real point.

You have to seize the principal contradiction. There is no point trying to walk through everything. Aim the specificity in three directions.

First, the places where faking is hard. A lie has to stay internally consistent down at the bottom layers of detail, and the coordination cost multiplies. The finer you spin it, the more easily it tears.

Second, the places where lying is expensive. Making someone alter a figure that has already landed inside a system is far harder than making him explain it verbally. Every additional item that has to be changed, and every additional person who has to be in on it, widens the gap.

Third, the places people overlook. Someone who has genuinely run the business leaves involuntary traces in the corners. Someone inventing a story never thinks to prepare them in advance.

Verify in those three directions and you do not need to spread yourself across everything. Pick the right opening and the whole hand shows.

Getting there is not easy. The first precondition is that you know the business well enough yourself, otherwise the moment the other man throws out a parameter you have nothing to answer with. You also need deep practical experience. Only if you have personally cleaned up a mess do you know where along the chain of events someone is most likely to bury the dirt.

You have to know both yourself and the other side, and be clear about where his knowledge ends and where his psychological defenses start. Only then can you predict what he has prepared and exactly where he is bound to slip.

And finally, this is physically expensive work. An operator needs abundant energy and the appetite to go down deep and chase until it is finished. Knowing what to ask is worth nothing. You have to actually ask, actually cross-check, actually pursue the details nobody else is willing to pursue.

The purpose of holding onto details is not to catch people. That has to be said plainly, or the whole thing goes sideways.

You ask these specific questions not to expose someone in the room and not to humiliate him. Most of the time what you want is a coordinate: do the numbers he reports line up with the work he actually does. If they line up, the seat is real and you can hand him the business. If they do not, you first have to establish whether you are looking at a capability problem or an attitude problem.

The two get handled in completely different ways. With someone whose capability falls short, you either add training or move him to another seat. A man who lies cannot be kept for a single day, because every piece of information he gives you is now untrustworthy, and every judgment you make after that is built on false data.

PE investors are used to looking down from thirty thousand feet. But if you are doing control operations and cannot see through the truth or falsity at the bottom, the whole building goes up on sand.

I choose to spend my energy on these concrete things. Showing real substance where lying costs the most is the basic self-defense of an operator.

Based on personal operating experience. Cases are anonymized.