When most investors hear the term due diligence, they typically think of analyzing financial statements and crunching numbers to gain insight into a company’s potential. However, a crucial aspect of due diligence that is often overlooked is the process of questioning senior executives and employees to determine the validity of their statements about the business model. In this episode, we hear from Phil ‘Dick’ Houston, a seasoned CIA officer known as the human lie detector. Phil has authored a book on spotting lies and has worked closely with entrepreneur Brad Jacobs on due diligence for senior hires and potential investments. Phil shares his methods for identifying deceptive behavior and how these strategies can be applied in the corporate world.
During the episode, Phil discusses what to look for when detecting deception, dispels myths about eye contact, and explains the psychological buckets he uses to understand deceit. He also highlights the ideal environment for lie detection and provides insight into using verbal and physical cues to encourage honesty in others. Phil walks through an example of detecting lies in real-time and offers advice on asking the right questions that many people tend to overlook during due diligence processes.
Overall, Phil’s expertise sheds light on the importance of questioning individuals during due diligence, as this can provide valuable insight into the integrity and transparency of a company’s leadership. By honing skills in lie detection and understanding verbal and physical cues, investors and business professionals can better navigate potential investments and partnerships with confidence and clarity.