Guide 07 · for owners and deal teams

Evidence grades: how sure is the number in your board pack

Every figure in a board pack looks equally certain on the page. Four words fix that.

By Cristian Paun · partner, Value Creation and Growth · Makers of New

The short answer

Give every finding one of four grades. STATED: one person said it. CORROBORATED: two people said it independently. DOCUMENTED: a document shows it. MEASURED: it was counted or timed. Print the grade beside the figure. A board then knows which numbers to act on, which to test first, and how wide the band around the plan really is.

Why it matters now

Plans are built on interviews, and interviews are testimony. A buyer's diligence prices testimony as doubt. The same plan with its evidence graded tells a buyer where to look and where to stop looking.

How to do it

  1. Grade at the moment the figure enters. Grading later is reconstruction.
  2. Let what people do outrank what they say. Shadowing, self-logged time and the system's own records sit above interviews.
  3. Upgrade the grade, never the figure. When a STATED figure is measured, the grade moves and the figure may change. Both are recorded.
  4. Spend diligence where the money rests on testimony. Rank the figures by euros at stake times how weakly they are known.
  5. Report the census. How many figures sit at each grade, and how many euros rest on each.

What good looks like

GradeFiguresEuros of the plan resting on them
MEASURED1€0.6M
DOCUMENTED3€1.1M
CORROBORATED4€0.9M
STATED6€1.6M

SIMULATION, an invented company. Here more than a third of the plan rests on one person's word, and that is where the next four weeks should go.

Where it goes wrong

  • Grades are inflated to make the pack look better. A grade is a promise about evidence, and it gets checked.
  • The grade is dropped in the summary. The board reads the summary.
  • Everything is MEASURED. Then nothing was graded.

The instrument

Every finding in a MakersOS room carries its grade, and the certificate carries the census, so an owner sees how soft a number is without seeing the evidence behind it.