Consulting can sometimes be perceived as a way to help with a business activity and be paid for it, without financial responsibility for the results. After all, consulting is in large measure advice and the buck stops with the client who decides how much of the advice to accept and when/how it gets implemented.
When coaches and consultants, especially those that have never actually existed in the shoes of their clients (that is, experienced their clients’ risks for themselves), merely provide an independent viewpoint and set of ideas, the perception above gets perpetuated. This is not to say that there is no value in offering an opinion as a service. However, perhaps it should not cost overmuch relative to specific consulting from much more experienced advisors. At a minimum, very early in the relationship, a coach should be very clear with the client about what his or her real-world experience has actually been.
I could expand much more on this, but my purpose is to frame up a different conversation. There exists a principle that I believe has gotten lost in a sea of approaches and solutions to business success being offered from an aquarium of self-styled advisors: authors, speakers, educators, coaches and “consultants”. Precisely because this principle is as old as commerce itself, universal to all business conduct, and fundamental to success is why it rises to the level of being called a principle in the strict dictionary definition.
PROPER RECORDKEEPING AND REPORTING IS CRITICAL FOR MANAGEMENT DECISION-MAKING. SUCCESSFUL BUSINESSES DO NOT TOLERATE SCARCITY OR INACCURACY IN RECORDKEEPING AND REPORTING. WHETHER OR NOT THEIR OWNERS AND EXECUTIVES ARE FULLY COGNIZANT OF IT IN THEMSELVES, THEY OBEY THIS PRINCIPLE BECAUSE, AT A MINIMUM, THEY HAVE ALREADY INSTINCTIVELY UNDERSTOOD THEIR CRITICAL NEED TO MEASURE THEIR BUSINESS PERFORMANCE ACCURATELY. WITHOUT ACCURATE INFORMATION, GOOD DECISIONS CANNOT BE MADE. DECISIONS MADE IN THE MANAGEMENT OF A BUSINESS ARE A PRIMARY CAUSE OF SUCCESS OR FAILURE.
I haven’t blogged much lately because I’ve been consumed with active consulting, but I observe a pattern that keeps repeating itself as I work. This pattern is crying for an explanation to a wider audience:
Virtually every small business is struggling with information management today – its collection, organization and interpretation.
The next software solution is never the solution – software is simply a tool that hopefully makes it easier to collect and organize information in a way that the manager already wanted to see it. But, since software gets designed by someone else without the design input of most users, it remains a real chore for most users to find useful software despite a plethora of choices. Most people get stuck with software that they end up settling for, forcing them to think in a way that is unnatural to them.
But now, let’s get real. Most small business owners don’t start with a die-hard commitment to collecting data about their customers, suppliers and employees in order to craft metrics that predict success. They don’t have any structured process for selecting software. They cannot self-design information systems that optimally measure, organize and report. They don’t even customize their bookkeeping chart of accounts. They begin instead only with the intense desire to start and own a business selling something they love. Faced with this monumental hurdle of information gathering and reporting, they allow themselves to believe that their intuition alone is sufficient to make profitable decisions.
And at least nine times (owners) out of ten, they end up being wrong. How wrong they are can be its own metric: how much time and money was lost due to non-strategic, unplanned, minute-by-minute decision-making?
This circles back around to my opening thought, which is that coaches who have not walked miles in their clients’ shoes are supremely challenged to craft complete solutions for them. Clients reach out for the help of others precisely because they are getting suffocated by unexpected setbacks, but don’t fully understand why. They lack good information that shows them why and leads to strategies for what to do next. For coaches that pop-in and try to get the lay of the land, who aren’t being provided with a clear picture because clients themselves don’t have clear data to give them, it gets especially challenging. And particularly so when such coaches have never practically solved a similar problem for themselves with their own money at stake.
Small business owners need to understand and accept that they are the Chief Intelligence Officers in their businesses. Owners already know (or should know) more about their determinants of success than anyone else. When they come up short on answers and need help, they should think logically about what they can reasonably expect from an outside perspective. An experienced advisor asks a lot of questions, and if owners already knew the answers (facts, not guesses) with data to back them up, consulting relationships would not last very long and would not need to. Consulting would simply put fresh eyes on a good set of data and draw some conclusions that perhaps the owner or manager missed.
However, once an expert consultant realizes that there is not a reliable set of information available, job #1 is to help the client start collecting and organizing information about their business so that it can be analyzed, conclusions drawn, and strategic plans created to improve future results. To do that, the consultant needs to deeply understand the client’s business pressures. These pressures inform the data design process. The right (and the right amount) of information that needs to be reported to the owner determines the way it gets organized and the method of collecting it. Even though they may understand business abstractly, conceptually and theoretically, I don’t know that very many helpers can deliver significant help without a deep well of actual ownership experience. Digging that well down to bedrock comes from years of first being the client, experiencing a client’s risks for themselves. Beyond this, should consultants also have personal track records of uncommon success overcoming their own challenges? (There is some comedy in the thought of someone who was unsuccessful showing someone else how to do it.)
I will step on some toes vicariously with these thoughts and I understand that. A lot of livings are being pursued in the gig economy right now by coaches in transitory states trying to figure out what they should do next in their careers. But my point isn’t really aimed at coaches, it is aimed at struggling business owners. You will struggle and keep struggling, short of supremely right-place/right-time luck, when you don’t accurately track and measure the demographics and dollars that flow through your business. You should not expect anyone to be able to sell you an effortless miracle like watching a magician pull off an impossible feat. Your success still starts and ends with you. But know that you are not alone feeling helpless at knowing how to collect and report information so that you can make great plans and decisions that lead to success. You will need to work hard, with advisor(s) if necessary, to design information systems, source appropriate tools (like software), implement and ensure that employees follow accurate recording and reporting procedures, and then regularly review that information and learn to adjust your management accordingly.
When seeking outside help, make sure your helper has done this before, can customize the solution to your and your business’s unique characteristics, and teach you how to interpret the data. Know that this will and should cost you a lot of money if you delegate all of the collection and reporting to the consultant because that takes time. The best-case scenario is for the consultant to bookend the process by helping you with information design and back-end information interpretation while allowing you and your team to do the lion’s share of the footwork to collect, organize and report on your business metrics.
And to all of the coaches and authors out there who provide non-specific, general advice – you are still valuable. Business owners sometimes benefit greatly from a motivational speech, the psychological comfort of someone to just vent with, or an author who reminds them of good personal business habits and attitudes. Just be careful not to promise all-inclusive solutions when what is really being offered is just conversation – charge for your time appropriately. And please, don’t sell the idea that a business can be transformed with a good thought and a smile.
Small business ownership has always been and will continue to be a very challenging but also incredibly rewarding work. I cringe at some of the post-2000 authors and coaches that claim the fundamentals of finance and operations management aren’t really necessary while all that is needed is a “can-do” attitude. That does owners a terrible disservice of selling them false hope. If you’re going to own a seaplane, you had better be prepared to collect a lot of data, perform a lot of equipment checking, research future conditions, create a good flight plan, and then keep rechecking all of your instruments in-flight and adjusting your course (then strap-in and smile with a good attitude while flying high).
If you don’t, you’re going to crash.