Small Business and Startups: The Elements of Good Advice Mike | September 29th, 2014
Every so often a really smart person, someone whose opinion you respect and intellect you admire will give you a piece of advice or some feedback. What do you do? You listen to them closely and carefully and, typically, you follow that advice or accept that feedback. The general rule for entrepreneurs especially is that, when looking for advice, you take the advice. Right?
Wrong. Not all advice is good advice and even the best of advisors, the strongest of mentors, and the most able of teachers can be wrong. Dead wrong, even. When considering advice, whether it is given free for completely altruistic reasons, or whether it costs money, in the case of a contractor or consultant, it is critically important that skepticism be your co-pilot. This is not say that guidance about your business shouldn’t be listened to, solicited, or acted upon, but rather that a grain of salt should be applied to all of the advice you harvest. Question closely and gain a thorough understanding of the advice being given, think carefully about the implications of acting on the recommendation, and always consider of the advisor’s motivation and incentives.
I have written before about some specific advice commonly given that is often inadvisable, but this isn’t about specific examples of bad advice. Rather this particular advice I am offering(!) is about determining for yourself whether the counsel is good or bad. So be the good entrepreneur you are and approach this issue carefully and analytically. Here is a 5-component framework that can help you to determine whether the advice should be taken or refused; acted upon or ignored:
1. Consider the source. Sometimes a mentor is the professor at whose knees you sat, gazing adoringly upwards and hanging on their every single word. Sometimes a mentor is one of your investors or board members who is there because she had bought into your company literally or figuratively. Other times a mentor is your crazy old Uncle who taught you how to field a grounder in 3rd grade. The point is that the first thing you should consider is who exactly is giving you the advice and why are they doing so. Credibility is key, and an advisor (whether they’re wanted or not) who does not come with much is probably not one you should put a great deal of stock in.
2. Consider the context. The big picture right? Next you have to remove the advice from the vacuum in which it is given and apply some context. Did you seek out the advice or was it unsolicited? Does this particular counselor have anything to gain by giving the advice or if you act on it? Ask yourself is there may be a hidden agenda or ulterior motive. As you contemplate whether to act on the advice, be sure to consider the timing of the action and whether it is right for now or it is something to plan for the future. Context is fungible and every business and each situation are unique, so take time to reflect on your own distinct situation.
3.Consider the timing. When a great piece if advice comes your way, always give thought to the timing. Not just the timing of the action you may take, but also the timing of the recommendation itself. Are you 2 days away from launch of a new product and the advice is to change your package design? Is the advice about certain tax matters for the fiscal year that ends in a week? When the advice is given and when the action will be taken are critical elements in determining whether the advice is good TODAY.
4.Consider your own biases. Just because I am inclined to believe certain information and consider it to be credible, does not mean that it is. In other words, it is my own bias that makes me want to believe something. Being aware of this “confirmation” bias allows me to defend against its nefarious effect. There are many biases which effect us as individuals and as organizations and, in business, it is essential that we defend against these. The same holds true with advice: we may be pre-disposed to accept certain advice from certain people and we should always, always recognize and question these biases.
5. Consider the risk. Newton’s third law of motion teaches us that every action has an equal and opposite reaction. Newton was one smart dude, no? In the context of this blog post it means that every piece of advice that you accept and implement will have an impact, hopefully positive, but sometimes negative. Just like with any feature you add, policy you adjust, or hire you make, the advice taken has the potential to do damage. So do yourself a favor and always consider carefully what the negative impact could be, what the probability of that outcome is, and whether the risk is advisable.