Episode 21: Business Advisors: Profiles and Pitfalls

Episode Summary

You brought in an advisor to help run your business or grow your company – but what role should they play? Is a facilitator different than a consultant? Or a coach different than a facilitator? Does it matter? On this episode we talk about how to define an advisor's role in the organization for the best outcome. 

Episode Transcript

Stephanie Chambliss Gaffin: 0:00

You brought in an advisor to your company, but what role should they play? Is a facilitator different than a consultant, or a coach different than a facilitator? Does it matter? On our last episode, we talked about different kinds of advisors, why to hire one and how to find them. Today, we build on that theme by talking about how to define their role in the organization for the best outcome.

Welcome to Right in the Middle Market, a podcast about pragmatic perspectives on running, growing and selling your business. We talk about the challenges, decisions, and most importantly, the actions business owners can take to create long term value in their companies.

Welcome to Right in the Middle Market, I'm Stephanie Chambliss Gaffin and today I'm here with my co host Mark Gaffin. In our last episode, we talked about different kinds of advisors, and how to get the most out of the advisors that you have around you. So that included, why do you bring in an advisor, the different kinds of advisors, how to select one. And we actually got a great response to the episode. So thank you all for that very much. One of the questions that we got in that I thought was really interesting was, okay, you guys gave us lots of good information about thinking about the role of the advisor, but you didn't talk at all about, what do you do when they actually get there? So we thought that would be a good thing to cover today, we want to talk a little bit about the different roles that advisors can play.

Mark Gaffin: 1:31

That's great. I think, again, I would I would add my thank you very much to the folks that had great, really great feedback on the advisor episode. And look, I think it's really important to, you know, you got to get yourself to the position of why would I bring an advisor and getting to a point, where is it, Yes, I want to do it. And so I think what we wanted to follow up on this episode, and I think this is important is to what role can they play, so if you have the right tools to be used on a job, it just makes the job that much easier. And so not all advisors are the same. And not all places to use them in the organization are the same. So looking forward to the topic.

Stephanie Chambliss Gaffin: 2:06

There are a million different ways that you can think about this. And I'm not saying that there are some that are good, that are bad, ultimately, the right one is the one that works for you. But we have a pretty simple framework that we think about and I think about the roles that advisors can play within an organization, along a continuum. But I think of four specific types. The first one is a coach. The second is a facilitator. The third is a consultant. And the fourth is an embedded advisor. What we like to do today is to talk through each one of those. What are they? What is the role that they play in the organization? What is the best use for that type of a role? When should you think about using that type of role? And then for each of them, what are some of the pitfalls and limitations? So, we're gonna start with the coach, I think is actually a nice place to start. I think about these, moving along the continuum, and Mark, I don't know if you think about it differently. But I think about them as really moving from kind of the most indirect involvement with the organization, to the most direct involvement in the organization.

Mark Gaffin: 3:16

No, I think that's actually a way good way to think about it and to think of what their scope is, to your point where they are. And not that there's no impact. If you're a coach to a CEO, you're gonna have impact on the great organization, you would hope, but what's in their actual mandate, if you will, of their of their assignment.

Stephanie Chambliss Gaffin: 3:33

Right. So taking the coach first, if you think about the role of the coach. The coach, first of all, is a one to one relationship. This is one that is happening largely behind the scenes, and matter of fact, you may not even know within the organization that a coach is present. Again, coaches have different ways that they tend to operate, but you may know that somebody has a coach, but you're probably not going to see them. They're working one to one, with an individual, typically behind the scenes. So that's the role that they're going to play. If you think about then the best use, I think about this one in a phrase that this is about elevating individual performance. So this is about how do we take an individual, typically on the leadership team, it may be somebody else, but typically this is on a leadership team. And if you think about the different use cases for a coach, this may be somebody who either is moving into a new role, not uncommon that you may see someone who has just been promoted and a coach is part of helping make sure that that person develops the skills to be successful, at the next level of the organization. You might see somebody who is overall a strong performer or is valuable to the organization, but they have an area that's been a challenge for them and they need some help to be able to really improve that performance in that particular area. So you might see a coach, that's focused with somebody around how they're interacting with others around how they're managing people. You know, there are different kinds of coaches, but typically, then that's going to be around either, a recent change or something specific that they want to improve. Mark, what other situations do you think for coaching?

Mark Gaffin: 5:25

Well, look, I think I've seen coaches used effectively in all company sizes, you know, from major, major, large, multinational companies to small startups. You see a lot of small startups now that are formed by high techie people, right. They're, really good engineers, they're really good at technology. But they realize in order to attract and retain people, that they've got some shortcomings that they may need to start to round up very, very quickly, if they're raising capital and growing hyper fast. And you've got to learn how to be a more well rounded person. So I've seen this, with, you know, with high growth sales people who now are taking greater responsibilities in the organization, you can see it with someone that's elevated to like a COO role, who now is not just a good plan, operator, they're brilliant at that. But now they have to start interacting with a bunch of other heads of the other parts of the company, and coming up with strategic visions, and dealing more with finance. So there's all kinds of really cool roles for coaches to play. And some of those may be internal. There's some companies that have internal coaches, and there's other folks that develop those outside. And again, this goes all the way up to the C suite and the CEO, as to, they need a sounding board? How do they sometimes when they're going public, or if they're going to have to increase their public persona in the community, they'll still get coaching there. So it can be very, very useful.

Stephanie Chambliss Gaffin: 6:50

When you talk about internal, I think it's important to talk about the difference between a coach and a mentor. And again, it's a fine line, but to me a mentor is and again, that sometimes is an informal relationship, sometimes can be a relatively formal relationship. And especially in larger organizations, you may have a mentor or sponsor that is a specific designated individual. But to me, a coach is, number one, it is somebody who is being paid to do a job, which I think is important. And I think one of-let's start to talk into a little bit of some of the pitfalls. I think one of the biggest pitfalls and limitations of a coach, is if you bring in somebody who is just a, is just trying to make you feel better. And yes, we all like to feel good. And there is a meaningful role in having somebody who is a trusted confidant, who, you know, that individual, that leader can vent to that is a safe space for venting, but only if the venting then helps you blow off steam to then get to more productive problem solving. I think otherwise, having somebody who just tells you that you're right all the time, doesn't actually help to elevate individual performance, which again, it was what we said was the main role of a coach.

Mark Gaffin: 8:04

Yeah, and I think one of the delicate balances of a coach too is, how much domain expertise do they really need to have, right? They don't have to be, I don't think need to be super deep in the technology, but I do think that you have to have some, I think what I've seen some other areas too where they're like, all of a sudden someone decides we need to have a coach for the C suite. So you have one coach for four or five people that may report up to the CEO, I think that sometimes can make it problematic for someone to feel like, you know, if you're talking to me, and then walking down the stairs and talking to my peers and walking down the hall and talking to the CEO, do I lose a little bit of that intimacy and the trust, I think you would really want to build with a one on one coach.

Stephanie Chambliss Gaffin: 8:47

When you talk about the expertise. I think the flip side to that is, or I guess it goes back to your earlier point about, know why it is that you're bringing in this coach. So the expertise that the coach may have, do they need industry knowledge? Might be helpful might not really be necessary, it may be irrelevant, but it depends what it is that you're trying to accomplish with bringing this coach into the organization and what you're trying to accomplish with this individual. You know, in your example of a startup CEO or CEO who's getting ready to take their company public, having a coach that has specific experience with that may be helpful. So let's move on then to the second type, which is the facilitator. So if I think about what is the shift from coach to facilitator, and again, we're moving kind of down this continuum. So whereas the coach is one to one, and behind the scenes, the facilitator is now one too many, working in a group and is very much going to be now present in the organization. They are, I think about this as, they're now working with a group typically, one of the key things that I think is really important about the role of the facilitator and again, this is my opinion based on my expertise and experience.

Mark Gaffin: 10:03

I was going to say you've done this about how many thousand times at this point.

Stephanie Chambliss Gaffin: 10:06

Yeah, this is one of my favorite things to do, it's something I love to do. But to me, this is a role where it's very important that you are not being brought in for your own expertise and experience other than that of around process and as a facilitator, but you're being brought in to really help get the group, make sure that all of the opinions and knowledge of the individuals in the group are coming out. So that you are getting the group collectively to a desired outcome, whether that is a decision or a next step or a plan or whatever that might be. But it is not about putting your opinions in. It's about eliciting the opinions of the group.

Mark Gaffin: 10:49

Yeah, I think most of us have probably been to those meetings from Hades, that goes off the rails, you got a lot of bright people in there and it was meant to be an hour, hour and a half long meeting or two hours, four hours later, you're still on the first point, and going round and around and around and the holes and so when you've been with a quality facilitator, who can keep you on track, if things need to put in a parking lot, all the tools that they use, it is like a breath of fresh air, because you can actually concentrate on what you're doing. And I know that the more involved C suite folks that I know that actually participate in deals, they love it, because it's like, I'm a participant, so I'm following the rules just like everybody else is, and you can actually get a ton done.

Stephanie Chambliss Gaffin: 11:34

Well, that's one of the things that I think is really important is that, we all know the executive that thinks that they can facilitate their own retreat- and this has nothing to do with their skills as a facilitator, but it has everything to do with their roles in the organization. And if you think about their ability to effectively be that impartial voice that is pointing out where ideas may be connected, or where ideas may be different among the group helping to drive to decision. Matter of fact, it was and I think I've given this example on one of our earlier episodes, but there was a retreat that I was facilitating. And there was a point at which the leader of that group who up to that point, had been able to really participate. So when questions were being asked, it was wonderful to see anybody in the room would ask a question, and it led to productive dialogue and they were really diving into the issues. And so at one point, the individual who was the leader of the group stood up, and she needed to present around a particular piece of information. At the end of that we hadn't carefully planned- this is a retreat, I was brought in to facilitate kind of last minute, we hadn't planned that handoff back. And all of a sudden you watched the nature of the questions in the group change. And it went from, I'm asking question to spur discussion, to I'm asking a question that I expect an answer. So that's really, to me the benefit of the facilitator. And I think, to me, the biggest pitfall and limitation is if somebody brings in somebody to facilitate, but they blur the line between the facilitator and the consultant.

Mark Gaffin: 13:15

No, I think that's right. I think there's a whole body of work out there and what makes us a skilled facilitator. And it's really important. It's not just making sure everybody gets airtime, but it's it is driving gently, but firmly guiding people along the path so that you're doing value added stuff in the agenda and not not just you know, wallowing and there needs to be follow up, you put it where it needs to be and you deal with it at appropriate time. But, you know, it may be, this is what we're trying to solve this particular point today. That's a very interesting point, the parking lot. And I have a question for you that I've always wanted to ask someone that does what you do in facilitations, can you use a facilitator in a brainstorming session?

Stephanie Chambliss Gaffin: 14:01

Absolutely. You know, again, if you think about the role of the facilitator, the role of the facilitator is to be able to help the group follow a process to get to a designated outcome. So, in a brainstorming session, take for example, one of the things that often happens in brainstorming, what's the biggest risk to brainstorming? It's that people start evaluating the ideas, or you know, too early, or that they end up with a huge list and then they don't actually have a rigorous method to narrow the massive list down to a couple of specific outcomes. If you bring in a facilitator, that's very adept, what they are able to do, is to help guide the group through, you know, gently reminding if somebody starts evaluating too early or judging ideas too early. No, we're still in brainstorming phase. Asking questions, probing questions to start to generate more ideas, seeing where we may not have enough diversity of ideas or we may be to all over the map, so you know, kind of how do we start to guide the group. And again, getting to a point that you make sure that you're leaving with action.

Mark Gaffin: 15:08

Yeah, I think one of the most compelling meetings I've ever been part of is, is a structured kind of brainstorming session where you see, usually the post it notes all over. If people have come up with all these ideas, but then getting them grouped, and you start to see people like, No, that's really not a group, well, yeah, I guess it is a group. And then you start to saw, okay, but there's a bunch of really good ideas. But there's a way to handle those that are not maybe part of where we're going, but you were heard, right, your little post it notes there, and there's a place for it, we're going to keep it, but these are the big groups. You can clearly see the 80/20 principle coming right before your eyes and how you get to prioritize, wow, these are some big things that would handle prioritize actions that would handle what we've just thought through.

Stephanie Chambliss Gaffin: 15:57

Well, and I think it's a it's a good example of why it's important for the facilitator to not be putting their own ideas up there, because like it or not, we all own our own ideas. Right, we can't help but look and say, Well, but that one was my idea. And if you are putting in your own ideas, it's very hard than to appear impartial. About now I'm facilitating the process of narrowing those ideas down. So again, just one minor example of where I think that distinction is important. I think that's a great bridge to talking about the next type, which is consultant. And let's continue with that right after we come back from a word from our sponsor. Right in the Middle of Market is brought to you by The Gaffin Group, a full service business consulting firm. The Gaffin Group works closely with middle market companies tackling the big challenges of today's environment and capturing the value enhancing growth opportunities of tomorrow. Too often, dogma, platitudes or wishlists, get confused with strategy. Then, it's no small wonder that execution can be muddled. The Gaffin Group principles work closely with company boards, executives and their teams to seek pragmatic, tangible results. They provide comprehensive advisory services across strategic, financial, operational and merger and acquisition capabilities, all framed by the fundamental belief that real strategy drives real results. The Gaffin Group is focused on delivering robust practical insights and fact based pragmatic solutions. Their services are designed to support their clients profitable growth, and sustainable long term value creation. Go to gaffingroup.com, to learn more about how The Gaffin Group can help you and your company. Welcome back. I'm here with my co host, Mark Gaffin. And today we're talking about the different roles that advisors can play within an organization. So far, we have talked about the role of the coach, which is one to one and largely behind the scenes, we just were talking about the role of the facilitator who is not bringing in their own, if you will, content expertise, but the expertise that they are bringing is really around working with a group, to drive that group through a process to a desired outcome. So now let's shift to talking about the consultant, which I think is probably one of the most common types that people think of as an advisor. And that's where again, I think it's really important to distinguish it from some of these other roles. So I think about the role of the consultant is again, now the biggest shift from as we're moving through our continuum. Now the consultant is somebody who we're bringing in for their specific expertise, or experience. We are now looking for this individual to come in, they may still be running a process, but the outcome that we're driving to is different. Very often what we are looking for is the consultant to end up coming back with a recommendation. I would say one of the boundaries that consultants- and Mark, I'd love your thoughts on this, the consultant should not be making the decision. But they often are making the recommendation, they are facilitating a process to get the leader who is responsible for making the decision to feel confident that they are able to make the right decision.

Mark Gaffin: 19:19

No, I think across the board with an external advisor, someone needs to be the decision maker to bring them in. And they should be responsible, ultimately, for any recommendations and ultimately for the outcomes as well. Right? You can't just abandon it. I hired a consultant to take care of that, and off we go. I do think and I don't want to foreshadow, I do agree with you on your point about domain expertise. I think there's such a great span here with consultants. So if you bring in a Salesforce consultant, right to help you with Salesforce, they may have a very specific add on a very specific tool that you're like, Oh yeah, we need that for my sales group. It's a consultant, it's an outside third party, but they're really coming in to overlay a product or service- if you will, canned and slightly customized to you. But that's still a consultant, right and you're still responsible for that getting done. If you have an HR person that wants to come in and help you with design a benefits package, right, they kind of have an idea based on the number of people you have how that might work, right? It's a little more, I don't want to say, you know, set in stone, but it's a little more narrow focus, right. And then you get to some of the folks that are going to be much more higher level, as we talked with strategy. If you have somebody coming in and thinking about macro, you know, meta business issues, that's a much greater scope.

Stephanie Chambliss Gaffin: 20:45

Well, I would say, that I think the two things that matter here, are making sure that you're obviously, you're matching the expertise, to what outcome is it that you're driving? So you've brought them in for a specific purpose, hopefully, that purpose is pretty clear, both you know and they know why you brought them in, so to match the scope and the expertise. In each of those instances, right, somebody is coming in making recommendations to you. And whether that recommendation is around your HR, your benefit structure for next year, or the strategy of the organization, the way that they're going to evaluate the information, they need maybe a more narrow or more broad set of the organization. But it ultimately is driving to that kind of an outcome. And I think this is where, you know, so whereas we talked about the coach, has the purpose of elevating individual performance. The facilitator, I think of as elevating group performance. Now I would say the consultant is the reason that you bring in a consultant, is to elevate organizational performance. It may be a specific part of the organization, but it's elevating organizational performance.

Mark Gaffin: 21:55

Absolutely. I mean, you're some part of the organization to cumulatively impact the whole organization. Absolutely.

Stephanie Chambliss Gaffin: 22:01

Right. So then finally, let's talk about an embedded advisor. So, you might call them an interim, or outsourced or embedded, different names that we hear, but now we're talking about a shift to, this is somebody who has now become part of your ongoing operations of the organization. I think one of the biggest differences here, so we've talked about kind of what is that key decision point? What's that key dividing line, as you move now to this point on the continuum? To me, it is, you now have an individual who is making decisions on behalf of the organization, I think, and Mark, I know you have some really strong thoughts on this, about what kind of decisions they should or shouldn't be making for the organization as somebody who's embedded.

Mark Gaffin: 22:52

Yeah, so I think of, there's not alaways a clear, clear, clear, distinct cut off here on where you go from one to the other. For example, I've been engaged with a multinational company, we were helping set up their corporate development department, right, which is buying companies. So I think we bought 700 million dollars worth of companies in nine months. So a whole bunch going on at any given time. But it was very clear, we helped with the process, we helped with due diligence. But I was very careful, right, I could get to a recommending part based on the information before me, based on my experience, based on the analysis, we've done, but the decision was the clients.

Stephanie Chambliss Gaffin: 23:39

And so in that, would you say you were in the role of a consultant? Or were you in the role of an embedded?

Mark Gaffin: 23:43

Yeah, that's kind of, I guess, my point I was embedded in that I was there for, you know, almost a year, year and a half, because it was a long, slog stage process. But it wasn't like, I guess I was the CFO. Like, so you get outsourced CFO, some of the CFO's left, someone's gone. And so you hire somebody for one of the agencies to be abetted. They're clearly going to have to have some decision making skills, right? But do they sign the checks still, right. Because they are still an outside person. And so I do think that you have to be very clear on what the roles or responsibilities are, whether it was my case, or whether it was an HR person bringing in temporarily embedded, or it's a CFO, or chief sales officer. I think you want to be really clear when you bring them in, is who's got the right decision rights, and what are the roles responsibilities going forward?

Stephanie Chambliss Gaffin: 24:37

I think that's right, if you look at both sides of that issue, one is, I guess it goes back to that match of accountability and authority. So how do you make sure that the individual who you've brought in to be an embedded or an interim, has enough authority that they can do the job that you've asked them to do while at the same time, recognizing that as long as they are still an outside person to the organization, there is a limit to the magnitude of the decisions that they should be making. So how do you make sure that you have the right person map to them, that you have the right kind of oversight. Again, this can be a very collaborative, very positive relationship. This doesn't have to be a harsh, negative, you know, kind of, I'm micromanaging by any stretch. And I think you have to make sure that you have that good open dialogue. I can think of a time when I was in a role similar to that, I was leading a large implementation. And the need of the client was such that I almost became embedded for a period of time, in all reality. And I still needed to be very cognizant of I could make decisions to a point. But I needed to be very thoughtful that I was not an employee of the organization. And so when it came to, for example, anything that was going to commit resources on the behalf of the organization, that was not an appropriate decision for me to make. And then I would chip back to this is where I can make a recommendation, but I need to bring in somebody else to make that final decision, because it's not my role to be making that decision on behalf and committing resources on behalf of the organization.

Mark Gaffin: 26:19

Yeah, and I think back when I was starting out, when I left commercial banking early in my career, and jumped over into industry. And I started working my way up to the finance department. I learned those skills by mentors within the organization, and if the CFO was an interim CFO, it can be a very positive working relationship. But you're like, it's just different if it's the CFO that you believe is going to be there as part of the organization.

Stephanie Chambliss Gaffin: 26:48

And I think that's one of the risks as well, if you're talking about an embedded or interim resource at a very senior level of the organization, there is always the risk, that you end up putting off some of the larger strategic issues that need to be dealt with, because it doesn't feel right for an interim person to take those on. We've all seen this where, you know, you have someone promoted internally as the interim, whatever. And they feel like well, I really shouldn't be the one to kick off this major initiative, or make these major strategic decisions, so the can get kicked down the road, which then can be a detriment to the organization.

Mark Gaffin: 27:28

Well, it's one of the things that we actually provide, you figure, we have smaller worker companies will come to us with an amazing bookkeeper, amazing chief accounting officer that may not be called the CFO. They don't have yet the strategic vision. It's something that comes over time after doing deals and, and being part of the strategy planning process and development process and execution. So we've been brought in to supplement that person, right, so that person still stays or they close the books, and they do in the budget to do all that kind of stuff. What we're trying to help them with, is help them grow. So it's almost like your coach in the beginning,

Stephanie Chambliss Gaffin: 28:05

I was going to say this is actually that's a great example to tie some of these together. So that's an individual that may need a coach to help them elevate and gain the skills if you're hoping that this person might grow in to be the permanent person, they may need a coach. And at the same time, you may need a consultant who can come in and fill that-

Mark Gaffin: 28:26

Do some stuff. And help them with deals.

Stephanie Chambliss Gaffin: 28:29

Yeah, fill that expertise and experience gap, making recommendations, not decisions. So that's a great example, I think of where some of these different types fit together. But again, if you don't clearly define those purposes, it can become very muddled. So I think that's actually a great place to cap off today. So again, just to recap, you've got your coach, who works one on one behind the scenes, and is really there to elevate individual performance. You've got the facilitator, who is working one to many, and is really they're focused on elevating the performance of the group. The consultant who now is coming in bringing specific expertise leading to recommendations for the purpose of elevating the organizational performance, and then finally, an embedded or interim, who is there to fill a specific gap. Okay, as we wrap up, two pragmatic tips. Let's each take one.

Mark Gaffin: 29:29

I think the the one you touched on earlier is still important part of me is, go into this knowing what you want them to do, and then who's keeping the decision rights, right? So that someone is still sponsoring this individual, whether it's a CFO than the CEO sponsoring that position, but somewhere, someone is owning the outcome of what that consultants is doing wherever they are, if it's a coach, it's the same thing. You have to make sure that the mandate is set up in such a way that it's achievable, believable and then you can execute on it.

Stephanie Chambliss Gaffin: 30:02

And I think mine is very similar, which is look at the advisors that you have in your organization right now. And even if you just list them out on a sheet of paper and say, Is it clear to me whether this person is acting as a coach, a facilitator, a consultant or embedded? And do I feel confident that we are clear on what that relationship is. So with that, I'm Stephanie Chambliss Gaffin and you've been listening to Right in the Middle Market, a podcast about running, growing and selling your middle market business. We'd love to hear your comments about today's episode or topics that you'd most like to hear in the future. And if you need help on some of these topics, feel free to give us a shout. Don't forget to subscribe to hear more pragmatic tips and until next time, be well and be tenacious.