Operational Due Diligence
Operational Due Diligence (ODD) is a thorough review process that examines how well a company actually works in practice. Think of it as a detailed health check-up for businesses. While financial due diligence looks at the numbers, ODD focuses on how the business runs day-to-day - things like how they handle their operations, manage their people, use technology, and control risks. Companies often need this done before making big decisions like buying another business or investing in one. It's like test-driving and inspecting a car thoroughly before buying it, but for entire businesses.
Examples in Resumes
Led Operational Due Diligence reviews for 20+ private equity investments
Conducted ODD assessments for merger targets in the manufacturing sector
Managed team of analysts performing Operational Due Diligence on potential portfolio companies
Typical job title: "Due Diligence Analysts"
Also try searching for:
Where to Find Due Diligence Analysts
Professional Networks
Industry Organizations
Example Interview Questions
Senior Level Questions
Q: How would you structure an operational due diligence review for a complex manufacturing company?
Expected Answer: Should describe a comprehensive approach including assessment of production processes, supply chain management, quality control systems, management team evaluation, and risk assessment. Should mention prioritizing key areas based on business impact and risk levels.
Q: Tell me about a time when you identified a major operational risk during due diligence that others missed.
Expected Answer: Should demonstrate ability to spot non-obvious issues, explain how they evaluated the impact, and how they communicated findings to stakeholders to influence decision-making.
Mid Level Questions
Q: What are the key operational areas you typically examine in due diligence?
Expected Answer: Should mention core areas like management structure, operational processes, technology systems, human resources, supplier relationships, and quality control measures, with basic understanding of how these impact business performance.
Q: How do you determine if a company's operational practices are sustainable?
Expected Answer: Should discuss examining efficiency metrics, employee turnover, customer satisfaction, supplier relationships, and technology infrastructure, showing ability to identify potential future problems.
Junior Level Questions
Q: What information would you request in an initial operational due diligence review?
Expected Answer: Should list basic documents like organizational charts, process manuals, quality reports, employee handbooks, and operational metrics, showing understanding of fundamental business documentation.
Q: How do you organize and document your due diligence findings?
Expected Answer: Should describe basic report structuring, document organization, and clear communication of findings, demonstrating attention to detail and organizational skills.
Experience Level Indicators
Junior (0-2 years)
- Basic document review and analysis
- Data gathering and organization
- Report writing
- Understanding of business operations basics
Mid (2-5 years)
- Complex operational analysis
- Risk assessment
- Stakeholder management
- Industry-specific knowledge
Senior (5+ years)
- Strategic analysis
- Project leadership
- High-stakes decision making
- Expert risk evaluation
Red Flags to Watch For
- No understanding of basic business operations
- Lack of attention to detail in analysis
- Poor communication skills
- No experience with report writing or documentation
- Unable to explain risk assessment basics
Related Terms
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