The Wall Street Journal published an article a while back about several small business owners who engaged in do-it-yourself consulting. These individuals, having met through a business networking organization (which charged some hefty annual fees), would provide each other with advisories.
As a professional consultant for the last 20+ years, I read the article with amusement. The premise of do-it-yourself consulting (just like do-it-yourself therapy) is no replacement for professional advisors when it comes to dealing with sophisticated problems, but those who want to engage in do-it-yourself consulting ought to be aware of the limitations and the downside to self-help for business problems. The obvious issue is that incorrect (but well-intentioned) advice can change small, manageable problems into big, serious ones.
Firstoff, the major of executives (and others) are not good advice givers - plain and simple. Well-meaning perhaps, but they lack the requisite skills and discipline to provide effective, actionable advice. Their skillset is primarily in execution - not planning or diagnostics. Those traits (usually critical for the advisor) are typically not in the DNA of an action-oriented executive (especially entrepreneurs). They act first, think later (maybe). This is one of the reasons why the startup management team at a business is replaced (by the VCs) once the business gets to a certain size.
For example - in the WSJ article, some of the business owners ran into cash flow problems. Their peers suggested cutting staff. Although that may have been the necessary fix, it really doesn't address the larger question of why they got into that situation in the first place. Were there tell-tales or early warning symptoms they ignored? Such after-action analysis isn't done by the action-oriented executive. Poof! Problem handled - next! Not surprisingly, in businesses that are managed in this manner you tend to see the same problems crop up again and again. Simply stated - there's no learning going on. They are too busy fighting fires.
Briefly stated, critical advisory skills are:
these traits are needed so there is both an accurate diagnosis performed and an effective solution developed.
- be an active (empathetic) listener
- professional disciple
- knowledge and process
Most "advice" that you receive (from other than a professional advisor in a professional context) is simply an opinion - and often an uniformed (or biased) one at that. Nothing wrong with opinions - as long as you realize that it really isn't going to help you solve the problem(s).
The executives profiled in the WSJ piece seemed to form little more than a variation of a guy's club - in other words - let's kick around your problems and then go out a play a round of golf. A discussion club, perhaps, but the problems will still be there when you return and get more severe with time.
Perhaps the best way to help you identify who would be a good business advisor would be to identify the traits of a professional consultant (that is, a paid business advisor).
Here are the most significant characteristics that you should look for:
Active listener - this is perhaps the most telling characteristic. The advisor plays close attention to what you are saying, and probes further. Needless to say - this in itself is a rare trait.
Diagnostic orientation - this is a probing for the facts, causal factors and or relationships that exist between events, people, circumstances, etc. Jumping to conclusions is a big no-no.
Disciplined process - a structured way of evaluating the information. One of the worse byproducts of do-it-yourself advisories is the unstructured mess of information that is typically received. The recipient is overwhelmed. A good adviser provides structure and priorities - in other words, not everything considered is of the same value.
Thinks in terms of options - there is seldom a single "right" or correct answer. Yet many seek such a perfect answer - since they are not be able to deal with the ambiguities of life (or business.) Every solution has pluses and minuses - the key is to maximize the pluses and minimize the minuses. A good advisor will highlight these for you - but leave the final decision up to you.
Considers the unique situation of the client - no two businesses are alike, and no one solution fits all. The differences lie in the management, resources (staff and money) and owner's objectives. A good advisor will try to key into that and determine quickly what will, and will not, work for that specific client. Conversely, a totally unique solution often isn't worth the cost. (Customized software comes to mind.) It's equally important to know when "close enough" is in fact close enough.
Maintains a certain sense of detachment - this is to help maintain a sense of perspective and to avoid emotional involvement in a situation. That's why family members are typically not good advisors, nor should advisors, for example, be investors.
These are the major characteristics of a professional advisor, and in general terms, what you should look for. There are few more, which will get you first cut candidates:
Longevity - as a general rule - a minimum of two years as a professional advisor. Anyone less than that is likely to be an out-of-work executive or manager - which does not a problem-solver make. Two years or more generally shows a commitment to being an advisor.
Beware word of mouth - word of mouth is given far more credit than it should be. The fact that someone recommends an advisor really means very little. Their situation and criteria for the advisor can be (and usually is) completely different than yours. Add the advisor to your list - but follow your own vetting and selection criteria. In years past I accepted some word-of-mouth recommendations and was disappointed with the results. In retrospect, I didn't follow my normal vetting process, but depended on someone else's criteria as a shortcut - which turned out not to be in alignment with my priorities.
Working for a consulting firm is not the same as being a consultant. Someone who has worked for one of the major (or minor) consulting firms has been nothing more than an employee. Until professional advisor talents are demonstrated, do not jump to the conclusion that they can solve business problems for anything less than the F500 crowd, or are anything more than an operations specialist (that is, spreadsheet geek). In other words, you don't want to be their first (or second or third) independent client.
Cookie-cutter franchises - some advisors work for a franchise-type of organization - in other words - it is a cookie-cutter set of solutions (such as HR policies or accounting systems, etc.) Cookie-cutter solutions may work for your company for simple stuff - but more than likely, for the big issues - they won't.
Finding and hiring professional advisors is very similar to finding and hiring good professional or managerial staff. If you are reasonably successful at that, then you should be able to find some good advisors, If not, well - you already have some problems to attend to.
Afterthought - the above commentary is not meant to imply that you should not utilize peer advisories - far from it. Just be aware that the point may arrive when you have moved beyond what can be addressed by your peers - and need to address more sophisticated issues (meaning that you have outgrown your peers), and/or confront the issue of business privacy (in other words, you really don't want your peers knowing the details of your business.)
Another factor you may encounter is the issue of access. For example - if one of my long-time clients finds out late Friday afternoon that they have an important weekend business meeting, and need to strategize to work up a game plan - generally, I can respond to them so that they go in prepared. That typically would not be the case with peer advisors - on a Friday afternoon they may well be sick of dealing with their business, let alone want to listen to issues about yours. It's a simple fact of life.
Professional advisors are professionals (and get paid for it) because they are available to their clients - when their clients need them. Something to keep in mind when you go the DIY route.
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