The other day, I did a podcast with Michael Kitces. We talked about my writing, and then he asked me why I’ve never written a book. Naturally, I’d thought about it from time to time, but I hadn’t really considered why I haven’t, so my answer off the top of my head kind of surprised me. “I never wrote a business book because they tend to be hero journeys,” I told him. “You know, where the author faces a major problem or pressing question, but comes out on top in the end. In my experience, most business owners need help dealing with failure, which most folks don’t want to deal with, let alone read about.”
The legendary New York Yankees catcher and manager Yogi Berra famously said, “90% of baseball is mental, and the other half is physical.” Well, half — or even 10% — of running a successful advisory business isn’t physical, but it is definitely 90% mental, especially when it comes to dealing with fear, setbacks and failure. As with other parts of our lives, in business, the only way to truly move ahead is to face the things that are holding us back.
Stand Up to Fears
While we all like to think that we’re unique and possibly extraordinary, I’ve found that most advisory firm owners tend to limit themselves due to a relatively short list of fears. The good news is that these fears usually can be managed once you’ve made the commitment to face them. Here are the most common fears that hold owner-advisors back:
Fear of admitting mistakes. We all know that nobody’s perfect. Yet most of us feel that sometimes we have to act as if we are, and leaders seem to feel this pressure more than others. What they don’t realize is that the people they are putting on the “perfect” act for almost always know the truth, and their act only makes them look worse. Nobody really expects you to be perfect (nor should you hold anyone else to that standard). Owning up to our mistakes makes us look courageous, honest and open with employees and partners.
What’s more, failure to face and admit our mistakes prevents us from moving forward. When we admit a project or plan didn’t work out the way we’d hoped, it frees us up to learn from our experience, to explore why it didn’t work and try something else that might be more promising.
As I’ve written before, there is no formula for building a successful independent advisory business. With experience, we can narrow the options, but the truth is that because every advisory firm is unique, growth is often a trial-and-error process.
The list of mistakes that firm owners can make is extensive, but the most common include issues with employees, partners, clients, vendors, strategic partners, and new projects or initiatives. In each of these cases, the key decision is when to pull the plug or redouble your efforts.
On the relationship side, it’s often hard to know whether you made a mistake or the result was unforeseeable, but it’s important to sort that out and learn from it. Then you have to decide whether the situation is reparable or not.
As advisors tend to be people-people, they are often willing to give others the benefit of the doubt and hang on too long. While I don’t advocate acting rashly (the other extreme), I usually suggest one heart-to-heart conversation and then a clearly stated reasonable time frame for the other party to resolve the problem. At that end of that period, it’s time to make a decision.
With projects that have gone awry, the question is usually whether to invest additional time and money to get the desired result. More often than not, owners will choose to pony up more money rather than admit their idea won’t work. In my experience, pulling the plug should be the first choice, overridden only when there are overwhelming reasons to believe that additional financing will achieve the goals. But in either event, it’s important to learn as much as you can from the experience. Owners who don’t use their mistakes as stepping stones can dramatically slow their growth.