In my experience, business consulting for advisory firm owners has many parallels with how advisors work with their clients. Case in point: Many owner-advisors, just like investors, often equate “doing something” with progress. Consequently, just like advisors, much of the value that we consultants add is keeping our clients from doing something when doing nothing would be better.
It’s human nature to want to “do something.” It’s what we do: we write things, paint things, design things, build things, fix things, sell things, buy things, move things around and talk about things. Many of us build our sense of self-worth by the things we do and have done. Yet through experience, we (often slowly) begin to see that many of our ‘best’ things are actually things we haven’t done: the angry email we didn’t write, the argument we didn’t start, the criticism we didn’t voice, the penetrating question we didn’t ask, the judgment we didn’t make or the caustic rely we didn’t give to our husband or wife.
In my work, I’ve found that this accumulated wisdom applies equally to building and managing a business. In fact, I probably spend nearly half my time keeping—or trying to keep—my advisor clients from ‘doing something’ when either they or their firm would be much better off doing nothing at all. Business owners are typically highly motivated to better serve their clients and to improve their businesses. Usually, doing nothing does not come naturally. Yet, there are times when doing nothing is the right thing to do: for their clients and/or for their business. Here are some those times, when we find advisors are better off doing nothing:
Scenario 1: Taking the Time to Make a Decision
Often, an owner-advisor’s instinct to act kicks in when he/she is confronted with a problem. Yet when they haven’t really thought through what they are going to do, we find the chances are far greater of making the problem worse rather than better. We counsel our clients to make a conscious choice not to act: to give themselves—and their team—time to consider what needs to be done.
When we just ‘do something’ the step that’s often left out is truly understanding what the problem is, which even in a small business usually isn’t nearly as obvious as you might think. Is that employee really a bad one, or is their job poorly structured? Is it another employee? Or is it vague instructions, or a lack of training? On the other side, truly workable solutions are often not the “obvious” choices either. Bringing in other team members to get other perspectives and opinions is usually revealing. And it makes employees more collaborative, and committed to their jobs and their firm. Very few problems that arise in advisory firms require immediate action—but a high percentage of ‘quick decisions’ result in bigger problems that require even longer solutions.
Scenario 2: Pulling the Plug Too Soon
Many new projects, ventures, programs and plans take time to succeed. Sometimes people need to acquire new skills or gain a new expertise. Other times, some critical mass is required to really get things rolling. As a business owner, it’s critical not to let our need to do something cause us to act prematurely. We like to see all new projects include a timetable that lists milestones and tells us when to be concerned. But even those are simply guidelines that indicate the time to gather more information: not when it’s time to panic.
The first response to disappointing results should be find out what went wrong and what needs to be done to fix it. Stopping a well-thought-out project, dropping a new service or closing a new market should always be the last resort, not the first instinct.
This is really a subset of Scenario 1, but it’s so common that it warrants its own comments. Independent advisors are notoriously bad at hiring. That’s because they tend to wait until they are desperate and then hire in a panic. In a small business, hiring is one of the most critical decisions that owners have. It requires planning and preparation. So when advisors feel that they just have to hire someone, our advice is: don’t. Take a deep breath, and first figure out how to handle your current situation without any more people.
Then, when you’re out of crisis mode, you can turn your attention toward whether a new employee fits into your long term plan, what you need to do to maximize their contribution to the firm once they are hired.
Scenario 4: One Step at a Time
When things are going well in an advisory firm, many owner-advisors just can’t see, to leave well-enough alone. Just because your firm has hit a quiet period, it doesn’t mean it’s time to do something new. For one thing, it could just be the lull before the storm. So at least take time to take a look ahead at the coming workload or predicable challenges.
Perhaps more important, both you and your staff need time to work through recent changes: to allow those changes to become business as usual. So be careful not to make big changes too close together. Give your staff a break, and ask yourself: Is this the time for what’s next?
Even though ‘just doing something’ is human nature, at some point, our clients start to see the wisdom in ‘doing nothing.’ Deciding not to act is just as much a part of being a good business owner as is taking the right action at the right time. If you don’t know exactly what you want to do, and why you are doing it, then doing something often can be worse than doing nothing at all.