How to hire an effective advisor when you aren’t an expert in their field
Advice for entrepreneurs and leaders to avoid "posers"
What happens when you know you have limited to no understanding of a certain subject and you need to engage an advisor to help you? How do you know if the advisor you are considering is the real deal or a total fake?
Oscar Wilde is credited with defining an expert as “an ordinary man away from home giving advice.” Throughout my career, I’ve noticed a number of “advisor explosions” following trends in certain industries, ranging from health care to technology to hedge funds. They usually focus on areas where money is flowing, either through investment or where a lot of companies require a certain new type of resource.
I first noticed the phenomenon of alleged experts crawling out of the woodwork when something becomes popular when I started in project management. Over time and with a proven track record of delivering significant projects effectively, I gradually worked my way into building program management offices (a pretty new field at the time). Most of the people who provided early project management services were well-rounded business leaders who had great abilities to lead by influence (as opposed to authority), understood how to communicate complex ideas, approached efforts with a journalistic zeal, and were highly capable of assessing risk and determining ways to minimize a risk’s opportunity to materialize into an issue. They typically had great software and reporting skills as well, and due to the value of the role and the cost/benefit of having project managers for significant initiatives, employers were willing to pay top dollar for these professionals.
And with the money comes the rest of the crowd.
As I progressed in my career, I started to encounter more and more “project managers” who had Project Management Professional (PMP) certifications, and really enjoyed making “to do lists” and filling out status reports. They did not have the necessary leadership and advocacy skills to bring a complicated project home. This is not to say a certification is a bad thing, but in my opinion, a certification alone does not teach someone the complex political navigation and communication expertise required to advocate for and enable the delivery of large-scale initiatives.
The unfortunate result was that, as the number of “paper tigers” in the field grew, the value of the discipline was reduced (as were the salaries).
Entrepreneurs: Beware of “Paper Tigers” and Self Proclaimed Experts
Another area where the “experts” seem to be flooding in is entrepreneurship. I have been fortunate to live in and be closely involved in two robust entrepreneurial communities. I have seen first hand the “cottage industry” that grows around entrepreneurship, especially when there is a spotlight on the community and a high opportunity for investment influx.
Unfortunately, just like many people call themselves entrepreneurs when they are not leading a viable business or just want to be entrepreneurs, even more individuals take the opportunity to position themselves as advisors and experts to this popular group. These “experts” are poised to target startups who might lack expertise and convince them to plunk down their last dime with the “promise” of effectively growing their company and securing new investment money.
“How Will I Know” An Advisor Is Right For Me?
Here are a few things to look for when vetting an advisor, especially when you do not have subject matter expertise in what they claim to provide.
Use behavior based interviewing techniques.
As a refresher, behavior based interviewing is “a technique which focuses on a candidate's past experiences, behaviors, knowledge, skills and abilities by asking the candidate to provide specific examples of when they have demonstrated certain behaviors or skills in the past as a means of predicting future behavior and performance.”
For example, “Tell me about a time when you helped a client go from point A to point B.”
Their first answer will probably be relatively high level. Your goal with this technique is to get a good amount of detail on how they did it (not just what they did), so continue to ask questions related to the context of the general information they provide. Ask about obstacles they faced and how they overcame them. Ask about the assumptions and limitations of the engagement. Ask about the client’s existing knowledge and experience with their fielaZd to verify that they have worked with individuals of high experience and low experience. These types of questions will force the “would be advisor” to give you a reasonable level of detail to ensure that they have actually done what they say they have, and not just stood near someone doing, leading, or talking about it.
Through these discussions, listen carefully to their answers, especially on “how” they were able to guide their client to accomplish the goal. Are their examples taken from business books, articles, and classroom settings or are they real world examples with real world descriptions (non-buzz word language) and actual results?
Going back to my PMO example, my employer at the time had engaged a very well-known and highly respected consulting firm (think ) to help them build their first PMO. Things were moving slowly. And, after several months of engagement, I was asked to get involved. In one of my first meetings with the individuals assigned to us, we discussed resource and capacity planning. They said a lot of “blah blah blah” things about the importance of this capability. There were all general statements and they used all the lingo you would expect. So, I said “Theoretically, I agree with you. My challenge is, I have never figured out a way to actually accomplish that level of recordkeeping and reporting without dramatically reducing the capacity available to do the work. Can you tell me how you’ve been able to accomplish that with your other organizations / through prior experience?” And my question was met with silence and blank stares….and, after that initial uncomfortable silence became really uncomfortable, there was an admission from the firm: they had never actually found a way to make what they were suggesting work either. Shocking, right?
Experts understand their subject matter enough to explain topics in multiple ways, using different examples, words, and descriptions. Test them.
Another critical “tell” of an advisor who may not have the experience you need is an inability to explain complicated topics in multiple ways. As you continue your early discussions, assess how well they can explain critical issues and their guidance. Make sure you ask at least one challenging question, see how well they answer it off the cuff. Then, regardless of whether you understand the answer, pretend you don’t and ask them to explain it again differently. Advisors who have “been there and done that” can typically explain and advise in multiple ways and using multiple examples and phrasing. Those who have learned only by observing or reading typically mimic the words they read, etc., and will often not be able to explain it at the more detailed level.
Most businesses fail in areas where business functions overlap. Can they help you “issue spot” outside of their primary discipline?
Most business leaders need to understand how the major functions in their business interact, be able to spot potential issues down the road, and also be able to assess whether actions taken in one area will have an impact on another, seemingly unrelated area. These might be decisions that a business makes regarding how they pay for project work and the accounting and tax implications of those decisions, how a technology system complies with relevant law, or even how your intellectual property or stock ownership might be affected by various funding arrangements. True experts typically have a lot of “battle scars” and understand how many pieces fit together across disciplines. For example, even if they aren’t a tax, legal, or IT expert, they should be able to articulate some things you should have on your radar (even if those things might require a different expert down the road).
Have they ever had an “in house” or non-advisor role that is relevant to your needs?
Telling clients what to do is very different from having done it yourself. While not always a death nail, it is helpful to see that your advisor has had positions with reputable companies and accountable responsibilities (not just a junior level, non-decision making role where they took orders from the person you should probably be trying to engage) for things in the area you are focused on. For instance, if you hire an executive coach to assist you in the unique politics of C-suite life, or to navigate boardroom situations, have they ever actually been in the C-suite or interacted in a substantial way with a board? This is not to say that a coach without executive experience cannot help you with some of the requisite soft-skills you need to be successful in these areas, but if they have actually “been there, done that, and lived to tell about it” they are going to have a perspective that only those types of “inner circle” roles can provide.
“You Better Shop Around”
When expertise is critical to your success, hiring the first person you find (or who is hawking their services on social media) may not be effective. Instead, talk to at least two if not three individuals or firms that claim to provide the same type of services. Include a few “test questions” which you ask each one, just to see how they answer and what specifics they might provide. These conversations will help you with the behavior based interviewing (as explained above), and also help you to sniff out those “paper tigers." It’s also great free research to help you grow your own capabilities in new areas.
In addition, if the expert you seek typically provides deliverable based work (processes or solutions) or will be responsible for “results'' rather than just advising, ask for their standard form agreement. This may include a master services agreement and a sample statement of work, or the service agreement may include everything in one. By gathering these forms from at least two providers and carefully comparing their approaches and the language they use, you can gain some valuable clues related to potential challenges in the services, and also how the different firms might differentiate the risk of their own services. If you take it a step further to determine some of the points you’d like to include (with ideas from all the documents), this early effort will likely save you time, money, and headache in the final negotiations of your agreement.
How to Avoid the “Cult of Personality”
In addition to the practices you can incorporate in your selection process above, here are some things to look out for that might be indicators that an advisor is not the one for you:
Scare tactics: Watch out for people who make it sound like the work is so complicated it can’t be explained…the “if I tell you that, I’d have to kill you” model. There is very little in business that is too complicated to grasp with the right advisor or teacher. Every partner you seek should, at their core, have your success at heart and be willing to help you develop you and your team to be as self-sufficient as possible by providing transparent and educational guidance (including the whys, the risks, and the potential obstacles).
Cult tactics: Another thing to watch out for are those experts and advisors who are focused on building their own brand (maybe to the detriment of yours), constantly asking you for detailed references and to talk about them on social media? Are they making you feel like working with them will give you access to a “secret” that is only allowed for “special” people and that you will always need exactly what they are offering only from them? Do they behave as though they are trying to build their own “followship” in your organization rather than assisting, enabling and empowering you to do so? If you see any of these “cult” tactics, run.
Buzzwords and “hacks”: Regardless of how technology and advances enable change, the heart of business remains the same. Provide a valuable product or service, find ways to connect that product or service to customers, ensure that your operations are efficient enough to create profit and scale, follow the rules that apply, and build long lasting relationships with vendors, customers, regulators, etc. If they are espousing a quick fix hack or something that sounds too good to be true, it probably is.
Organic referrals v. requested references. Even the most discerning business leaders often are not sure how to assess the capabilities of an advisor, and many ask for or rely on references. But here's the rub: just like when you provide a reference for a job, you aren’t going to refer anyone who doesn’t sing your praises. Conversely, an organic referral by other business leaders that you trust, especially when it isn’t in response to your specific need, is a much more valuable and reliable “reference.”
Beware of huge growth in a certain discipline. I know a lot of great executive coaches with real-world C-suite and board experience and development skills honed from years of effective leadership to help you be your best. But, I also know a lot of “coaches” who are emotionally-intelligent people with a passion for helping, but who may not have the experience to truly get you to the next level. According to Upcoach, “there are currently over 71,000 coaches worldwide, which is a 33% increase since 2015.” Since there are few requirements, licenses, or experience required to hang out a shingle and say “I’m an executive coach,” the influx of providers and an increase in demand will likely spur additional fast growth. Like so many other disciplines that follow the money, the average quality will likely decrease as the provider count grows.
“Man [or woman] of the hour”: A comment on hourly rate v. efficiency
Remember the old adage, “you get what you pay for.” That is never more true than when hiring advisors. This is not to say the most expensive person is best, but you have to consider things like the cost associated with a larger body of experience (including local, regional, national or international experience in multiple industries) and the efficiencies that come from that experience. For example, at PrepOverCoffee we focus a lot on the importance of anticipating events and issue spotting. The more exposure an advisor has had to a variety of scenarios and industries, the better they will be at anticipating events and helping you avoid issues. What also comes with experience is greater efficiency to explain and address these issues.
Before I was in private practice, I worked a lot with law firms. I typically preferred to have a partner on my matters because, even though their hourly rate was much higher than an associate’s rate, they could often address what I needed quickly and off the top of their head (as opposed to having to go research). So, thirty minutes of a partner rate was still a lower total cost than hours of a lower associate rate, and the time savings for me in getting the problem off my desk was often priceless. Thus, as you consider the rate, also consider the need for broad-range experience and expertise in your advisor (which likely will cost a bit more by the hour, but will save you much more in headaches avoided and efficiency created).
Trust Your Gut
One of the things that differentiates successful leaders and founders is their self-awareness. The ability to recognize their shortcomings or the areas where they do not have the expertise or proficiency to adequately address a specific business need. Unfortunately, these “self aware” leaders are often sold a bill of goods by “trusted advisors” who are not adequately equipped or experienced to deliver efficient and thoughtful advice in their area of “expertise.” Using some of the techniques above, you can try to parse out those “paper tigers” from the real deal.
This is not to say that “first time” or new industry advisors and consultants don’t have a place. Everyone has to start somewhere, and often, newer consultants are hungrier to succeed, have more capacity, may be more willing to negotiate rates, and may offer creative insights that are not currently part of the more prominent “thought leadership” of the day. In the end, make your final decisions with open eyes based on your own self awareness, your gut instinct about the other person, the scope of help you need, the anticipation of future challenges that might not be on your radar, and the results you expect.
And…