Even before each of us entered the mixer called business, where concepts are blended in countless combinations and functions are dissected horizontally, vertically or diagonally, where analysis and synthesis fight with execution without interruption, there existed a field that seems to come from before our times, called advisory. We were born with it and we will leave it behind us. At least that's how it seems it will continue to be.
How does this discipline manifest itself? We have a structured and an unstructured approach. In the first approach, advisors possess or borrow certain tools invented by them or by others, with the help of which they arrange in some order certain analytical notions that in the whirlwind of daily business, entrepreneurs neglect or sometimes simply ignore. What is the moment when the entrepreneur appeals to an advisor is a subject we address below. With the help of these tools, the advisor performs due diligence of the situation in order to then make a diagnosis. One of the problems is that usually this diagnosis is made considering a limited portion of the business without taking into account other interconnected segments. We talk about financial management without talking about sales management, about marketing and positioning strategy, about organizational structure and motivation tools and many other nodes of the business network. We talk about financing without talking about growth strategy, about available resources both material and human. Another problem lies in the lack of experience of those who give us advice. Although it is almost impossible to have found ourselves at some point in the same situation as the entrepreneur, there is sometimes the possibility of having gone through similar problems in such a way as to have learned from success and failure. On the other hand, most advisors were born advisors and grew up being advisors without having any personal experience in business. For those who have read Nassim Taleb, this problem bears the generic name of "lack of skin in the game" and reading the arguments brought forward, I have come to believe that it is a serious problem. It is extremely frustrating for an entrepreneur to receive business advice from a person who has no direct interest in the business and no explicit experience in the analyzed field. This is why a team is needed where someone structures and executes the action plan while someone else responsibly analyzes the business as a whole, with an emphasis on the specific field addressed. Here we also talk about the unstructured approach that analyzes in a personalized way the entire business model to find the solution to the problem identified by the entrepreneur. Therefore, it seems that the best model is the combination of the two approaches - structured and unstructured - which has the best chances to analyze, diagnose and propose an eloquent and solid solution. If we have reached this conclusion, we return to the question: when and why does the entrepreneur decide to appeal to an advisor? Generally, businesses live and die according to available cash. However they are built, this is the final analysis tool and the resource without which nothing is possible. Thus, the moment when the entrepreneur appeals to someone from outside is when either they have a cash problem, or they need an investment that they hope can solve a growth need. More cash, more productive assets, more profit. Although the need starts from deep within the organization, it becomes apparent in the financial area and companies are sometimes too early in their journey to afford a quality CFO. Then they understand that they need someone who understands the business and with whom they get along well.
Perhaps you will continue to call this discipline advisory. Perhaps you will look for what you know works because apparently it has always worked. I challenge you, however, to think: wouldn't a temporary extension that adds to your business the resources it needs be better? How would it be if from time to time you managed to appeal to a good medicine whenever you feel the need to get back on your feet? A team to call upon from time to time, a power house that brings additional resources where you need them. How would that be?
