Background screening - forecasting (pilot article)

The weather is extremely hot these days in St. Petersburg. The sky reminds me of the Creedence Clearwater Revival with its’ famous “Have you ever seen the Rain?” I’m not sure I have seen it.

Nowadays every citizen of St. Petersburg pays additional attention to weather forecasting – Will the cold wind blow? Will it rains? Who’s responsible for these sunrays attacking us 24 hours a day? In this aggressive environment I’ve decided to write a short series of articles about some particular qualities of Russian business forecasting in the context of background screening and external investigations.


It is reasonable to say a few words about forecasting in general and how it is related with background screening.

In most cases the client (even if he asks for basic background check of private or legal body) needs some data to make a decision. In my practice about 70% of clients' decisions are to be made about future activity of the Subject, not the past. Will the Subject try to steal my money if I’ll hire him as a financial manager? Can I rely on my partner honesty? Will the Subject ever repay his debt????
If you’ll say that the client has to make the decision himself you’ll be absolutely right. Responsibility of the PI is limited to his/her reputation, contract value, license but the client has to accept all the risks including even personal safety risks (if we talk about joined ventures with organized crime).

On the other hand, particularly if we talk about international projects, I often see that the client tries to make the decision without deep understanding of local business practice of Russian companies; commonly used indicators of reliability fails to predict or even classify the Subject activity. It is absolutely clear when you deal with a global company whose unified risk-management standards make decision making procedures inflexible to local environment.

Several times I was forced to spend hours in negotiations with my clients and team members explaining why the Subject must be treated as reliable/unreliable company or private person. At last I made a decision to include sections “recommendations” & “subject forecasting” in applicable reports. This decision was made as “try before you implement” and many questions aroused at the very beginning:

1. How to forecast subjects’ behavior? If it is just your expertise why should the client trust you and treat your prediction as something valuable unless he has positive experience of cooperation?
2. How to develop simple and unified methodology of forecasting for subject behavior in unknown environment?
3. How to convince the client that he has to give you as much information as possible about his reasons of background screening (I often work with contractors and sometimes they prefer to give less data then needed for forecasting)?
4. How to stay profitable? Should we do forecasting as a complimentary research or ask for additional payment?


It is reasonable to mention that previously I was involved in a number of business strategy development projects and had experience of long-termed planning and prognostic analysis. This knowledge was extremely helpful when I started the process of formalizing forecast methodology for background screening of legal bodies.

I’ve decided that if I’d be able to reconstruct main strategic goals of the subject and collected data will match the way I assumed the company is trying to reach these goals my forecasting will be much more reliable than simple expertise. It was clear that usual methods like BSC strategy map won’t work in this exact case: too much work with insufficient data and unexpected results.


That’s all for today.
I will be glad to see your comments to this introduction of a series. Does this problem exist in your area? Do you think that forecasting is applicable in background screening projects?
I’ll try to post the next article of this series by the end of this week.