These days there is a lot of ‘help’ out there for owners of independent advisory firms provided by broker-dealers, custodians and assorted financial product companies. Most of this help falls into one of two categories: business consulting and business coaching. Many folks use these terms interchangeably, including some coaches and consultants themselves.
And, yes, there may be a bit of overlap in the services that a few coaches/consultants offer. But not as much as you’d think. That’s because real business coaching and business consulting involve very different kinds of help for owners and their firms.
To get the results they are looking for, owner advisors need to be clear on the kind of help they need.
In simple terms, the difference between the two boils down to this: Coaches tell owners what they need to hear; consultants them what they need to do. Let me explain.
Some firm owners (who have business backgrounds, went to business school or have worked with a business consultant) know what they need to do to make their firms better: more successful and/or more like the businesses that they really want to have. But for various reasons—which in my experience, are far more common than one might think—some owners have a very hard time actually doing what they need and want to do.
Enter the business coach. I know what you’re thinking—that this kind of self–destructive behavior requires a psychologist rather than a coach. And you’d be right. But the ‘but’ here is that many people a lot smarter than me have observed that great coaches in any sport or field are, at heart, great psychologists.
And this is definitely true when it comes to business coaching. Business coaches provide a number of valuable services: they help owners to identify their strengths and weaknesses, to explore the reasons behind their self-destructive behaviors (a lack of confidence, the fear of success, etc.). They help create goals and provide accountability for working toward those goals and, perhaps most important, they remind owners of their strengths and help them maintain confidence in themselves: to succeed but also to deal with setbacks and keep moving forward.
We business consultants have a very different job. Yes, sometimes we do these things (helping advisors deal with setbacks comes to mind), but even then, we come at it from a very different angle. As I mentioned, business consultants are for owners who don’t know what they need to do to make their businesses more successful. Now, don’t take this the wrong way, but in my experience, that’s the vast majority of owner advisors.
And there’s no reason why they should know. Most advisors are trained to be financial professionals, not to run a business. (In my experience, most doctors and lawyers aren’t very good at running their businesses, either.) So the job of a business consultant is to teach owner advisors what they need to know to successfully run an advisory business: to train them be good business owners. In the vast majority of cases that means pointing out the things in their businesses that they aren’t doing, or need to be done differently and better. Essentially telling them that “they” are the problem.