Blog | 9 Pain Points Business Owners Face Working with Advisors (and How to Solve Them)
The business owner-advisor relationship is critical to the success and satisfaction of an owner when it comes to transitioning their business. In this blog, we touch on the most common pain points owners face when working with an advisor – and how to solve each one.
In our experience, business owners working with advisors report running into many common pain points when working with advisors. These situations arise through no intentional fault of the advisor or the business owner, but they are the natural result in the current owner-advisor relationship ecosystem.
Let’s outline these main pain points then uncover their root causes.
The 9 Pain Points
#1. Poorly defined destinations/outcomes
This happens when there is no clear communication on what the owner’s goals are and what they would deem as a successful and satisfying outcome.
#2. Advisors providing competing recommendations and no way to reconcile them
Business owners work with many advisors, and it’s quite common for advice to be in conflict, which causes confusion for the owner.
#3. Myopic solution sets – the proverbial “hammer & nail”
Advisors in all disciplines use tried-and-true solutions. The problem is these approaches don’t always work for every client.
#4. Competition for limited time and attention
Business owners are busy, and it’s a challenge for advisors to get the necessary time they need to effectively advise them.
#5. Draining capacity
Similarly, business owners are busy people, and their capacity to take on new challenges can drain quickly for good reason.
#6. Quick fixes that have unintended consequences
Sometimes a solution may seem obvious, but that advice can then lead to consequences that both parties may not have been able to see coming.
#7. Advisor centric processes that are tedious and redundant
These processes may be important for the advisor to get the information they need to work in their client’s best interest, but if the process is tedious, busy owners won’t complete it.
#8. Inadvertently pitting owners and/or family members against each other
Businesses involve many parties, and sometimes advice may pit an owner against the interests of members of their family or management group.
#9. Money in motion creating divergent economic interests between the needs of the owner and the advisor’s bottom line
Many advisors are incentivized to make a deal. This can be quite detrimental for business owner clients who are not ready to sell or hand off their business to the next generation.
The Root Causes of these Problems
There are two main causes that lead to these problems. The first is the environment or ecosystem that these advisor-business owner relationships play out. The second is an owner’s predisposed wiring or psychology. Let’s dive into both.
The Advisor-Owner Relationship Ecosystem
Most advisors are skilled and economically incentivized at points where money is in motion at the point of transaction. Thus, the ecosystem creates forces driving owners to engage in decision-making before they have resolved critical issues of personal values, psychological needs, and organizational goals.
These are the issues we like to call the “below the surface” issues, and if unresolved, they can lead to an unsatisfying transition outcome for all parties involved.
An Owner’s Psychology
An owner’s psychology predisposes them to believe they can solve transition challenges at some point in the future when it becomes important. This wiring for confidence and practical problem solving is an asset for starting and growing a business. But it can present challenges once the owner gets the business to a certain scale.
At some point nearly all owners fall victim to the human brain’s natural tendencies. The shift from “playing to win” to “playing to prevent losing” occurs almost imperceptibly causing owners to avoid risk taking and increasing their attempts to control their situation in a way that is counterproductive.
The Crucible of Business Transitions
These conflicting dynamics are perhaps most pronounced at points of significant transition, which we define as scaling a business through growth barriers, selling a business, and engaging in a family succession
An owner’s wiring becomes a challenge if they hit a growth plateau they cannot overcome or when they choose to engage in exit via sale or family succession. Many owners do not consider the issue until the business begins to decline or they decide to exit.
By delaying attention to these important issues owners play a reinforcing role in the current ecosystem. It is a case of their own psychology working against them.
The Solution – Getting Below the Surface
While not immediately intuitive, advisors and owners face the same challenge – the proverbial “two sides of the same coin”. The solution begins by understanding the psychological process owners need to achieve a successful transition. To leverage the most fundamental contributor to their success (their psychology) owner’s must build an approach that begins with robust exploratory process before moving to the strategic or execution phases.
That means we must disrupt the current ecosystem. Owners choosing to do the hard yards of exploration earlier rather than later reap the rewards.
At Clear Water Insights, our goal is to aid that exploratory process so that owners understand their ecosystem and leverage their own psychology instead of having it used against them when it matters most.
That’s why we created the Owner Transition Profile. This owner-friendly assessment that can uncover the underlying psychological factors that play a major role in the outcome of a business transition, empowering advisors with the insights they need to communicate better with their clients to avoid these common pain points. If you want to take the first step to going below the surface with your business owner clients, then talk to Clear Water Insights. Our Owner Transition Profile can give you the insights you need. You can even try it free.