By JOSH PATRICK via @nyt
Jim Collins writes that one of the keys of successful companies is to have the right person in the right seat. I don’t think anyone would argue. But I do wonder why we don’t take the same care hiring outside advisers that we do with hiring employees.
As we saw in my recent series of posts on Holly Hunter’s attempts to sell her business, much of her pain came from hiring the wrong advisers. To review, Ms. Hunter hired a friend to represent her, hired a broker who claimed to represent both the buyer and the seller, and hired an attorney who didn’t have much experience in transactional work.
These sorts mistakes look glaring in retrospect, but they are not unusual. Many business owners make them — and not just when they are trying to sell their businesses. They can happen any time an owner hires someone from outside the company to provide advice and guidance.
If you own a business, you hire outside advisers. If you own a small business, you may even outsource crucial functions. It’s one of the ways micro-businesses keep their employee headcount low. I spend a lot of time these days helping owners figure out how to make sure the right person is doing the right job.
First, it’s important to understand that the people who advise you bring their own worldviews. They have an expertise, and that expertise tends to color how they see things. Lawyers tend to look for legal solutions. Accountants look for tax-based solutions. It’s important to understand that and to think about what you are trying to accomplish. If you start with clarity about what you want to do and why, you give yourself an advantage.
Next, move on to how you’re going to get there and who needs to help. Having a system for hiring the right help is often the difference between success and failure. The first question to ask when hiring an outside adviser is, do you need a specialist or a generalist.
If the outcome you’re trying to accomplish is relatively straightforward, you probably need a specialist. But when things get complicated, such as if you are selling your business, you may benefit if you have either a specialist who can think globally or you a generalist who gets the big picture.
Next, I suggest you ask yourself a question: “What type of adviser do I work with most successfully?” You may have to do a little soul searching. I find that I’m most successful with advisers who share my view of how the world works. Do they need to be in control? Do they work well collaboratively? Do they listen well? I need to know the answers to these questions before I’m willing to sign on. The questions you need to answer will likely be different from mine.
Then, make sure the advisers you are considering have the technical skills you need. Make sure they are accustomed to facing the issues you’re facing. You might have to pay a little more, but in the end you will probably end up saving money, time and aggravation.
Along with technical ability, you want your advisers to demonstrate that they have been successful in achieving the type of outcomes you’re interested in. This means you must check references. Don’t just ask where they have been successful, ask them to describe a time things didn’t go well and what they learned.
Throughout the process of hiring and managing outside advisers, it is important to maintain control. This was part of the problem when Ms. Hunter hired a business broker. That broker represented both the buyer and the seller, and Ms. Hunter lost control of her adviser and her sale. (It didn’t work out very well for the buyer either.)
Make sure the adviser you hire understands why you hired him or her. Let this person know why the outcome is important to you. If you feel your adviser is taking you off course, it’s your responsibility to rein him or her back in.
Have you thought about how you hire advisers? What kind of success have you had? Do you think it makes sense to have a system? What advice would you add?