Things at my company had taken a bad turn and I was alone at the helm with the bank on the phone. It wasn’t just my product or my reputation at stake anymore. There were people paying their mortgage with a company salary.
The terms the lender was trying force on the company were extremely onerous, even by venture debt standards, but I felt I had to accept those terms or the company would fold. The lender was advising me that this would be the best move for my company and my employees. Instead of agreeing immediately I called a guy I knew as knowledgeable about venture debt and what are called “workouts”. I didn’t know him well, but enough to know his advice would be solid, and enough to be intimidated by him.
This guy was hard to be around. The kind to say to you, “You’re being a stupid ass.”
I told them the terms and he said something like, “That’s totally outrageous. Why are you even considering a stupid offer like that?”
It was harsh but it worked. It gave me the confidence to go back to the lender, with some more of his advice, and negotiate a fair deal that would preserve the company and get the lender paid back, albeit under different terms.
I got very lucky that day that he picked up the phone because the worst time to look for a business advisor is during a crisis. You’ll be looking for any port in the storm and that could leave you open to receiving advice from someone who isn’t qualified and doesn’t have your best interest in mind. Don’t make yourself vulnerable to what could be business-ending advice in bad times.
Use these tests to vet potential business advisors before a crisis and find someone who can walk with you as your grow your company.
Look for an advisor who’s smart about your industry, not just smart
Just because s/he is smart does not make the person qualified on a particular topic. You know your doctor is smart, but would you take his advice on your stock portfolio? If his advice on a medical stock is based on a related medicine he’s using, then fine, but not because he’s got a higher degree than you. You need an expert in your industry or the particular subject matter under discussion. What is the background or experience of this person that makes him or her suitable? Always have a skeptic’s mind, that is, Is this person really qualified to opine on the topic in question?
Look for an advisor without a motive to manipulate
Have you ever received advice from someone and later found out that they benefited from you following through on it? That’s not advice in your best interest, that’s manipulation. Getting direction on your business is not supposed to be a consultative sales process. Fellow employees, co-founders, investors are not good candidates for advisors. Some disengagement gives perspective. A good test question, Does he or she profit by me taking this advice?
And what is this person’s motivation for helping me? Does this person need you to take their advice to satisfy their ego? That’s the worst kind of advisor.
Look for someone who isn’t a cheerleader (or a jerk)
You probably have enough people in your circle telling you how good your ideas are. The last thing you need is a validator. A true advisor can save you a bunch of money when you try to implement a poorly thought out plan. Someone who is always giving you good feedback is a warning sign. What you need is “reality adjustment therapy.” Not, Wow! Great idea! More useful feedback would be, That is the complete and total wrong market for this product. Did you research your customer? True advisors, like my guy on the phone, are not always pleasant to be around. They’re truth tellers. You want them to ask the questions you are trying to avoid, even though it’s uncomfortable. That will keep you out of the reality distortion syndrome. If he or she can attack the idea, without attacking you, than this person has the right mix of honesty and humanity. Steer clear of “brilliant” business people and entrepreneurs who are condescending and cutting.
Look for someone who is self-reflecting
You know you need someone who can tell you if you have a bad idea. But what about someone who gives you straight up, solid direction? Good right? Not good enough. True advisors, like teachers, are good at equipping you for future situations by helping you learn how to think. Look for an experienced person who is self-reflecting on their own actions. This person can reveal their thinking behind their own pivotal business decisions so you have some context for approaching your own. Simply copying your advisor’s business moves won’t make you successful long term. It’s reflection (not specific repeatable steps) that gets you to the right answer for you.
Lastly, look at yourself and your motivation
Why are seeking help? Before you ask for a potential advisor’s time, vet yourself. You may not be ready for them. Ask yourself this series of questions to reveal your motives:
- Are you looking for approval?
Are you looking for someone to say, Good job, instead of, Do better? Then you want tea and sympathy, not advisement.
- Can you be honest?
Do you spin the facts or sugar coat things when you go for advice? Or are you going to keep the truth from your advisor to make yourself look better? Then you’re not ready to be taught.
- Do you have real commitment to use the advice?
Will you put into practice what you learn from your advisor? I once had an employee who regularly asked for feedback, because he thought that’s what he was supposed to say. But he had no intention in implementing it. It was a waste of time for both of us. If you seek advice it’s your obligation to accept it and not argue it. Later you can reflect and decide to implement the feedback or not.
- Are you looking for a counselor?
Is it business advice you need or help with your personal issues? Take your baggage to a therapist. Advisors help you maximize your performance, not fix your personal problems. If you need counseling (and we all may at some point) go to the right professional and come to this advisor/advisee relationship healthy.