Volatility has established a new norm of late in this country and around the world. We can probably pinpoint when it started and the reasons for it, but we can neither control it nor predict its final outcome. The only other alternative is to respond to it more aggressively with more structure and better ideas. That means CEOs and business leaders need better, more immediate advice to the problems they have always faced and the new ones that have reared their ugly heads. Private advisory groups provide armament in this newly-defined conflict.
Private advisory groups exist for the sole purpose of helping you make smarter business decisions. They differ from boards of directors and family councils because they do not vote, nor do they have fiduciary obligations. Often private advisory groups co- exist with a board of directors or a family council, but more often, owners or CEOs join them when neither of the other kinds exists. Private advisory groups can be general in scope or targeted to specific markets, industries, or issues such as adopting new technology or going global.
Private advisory groups offer numerous other benefits to the CEO and here are five:
1. CEOs seldom receive unbiased information, and they don’t always spot a bias when they see one.
Conventional wisdom advises: “Don’t ask the barber if you need a haircut,” yet the organisational equivalent to a cast of barbers populates every organisation. No CEO can be certain he or she will receive impartial information from those who have a stake in the outcome of the decision.
In addition to offering prejudicial opinions, members of the organisation tend to “filter” information that reaches the top. Like the king’s taters of medieval times, those in the CEO’s chain of command too often sort out what information should go forward and what should stall. CEOs need unfettered access to all relevant information. Sometimes a private advisory group can offer more information; at other times they will recognise that the CEO doesn’t have all the data that he or she should have received from those in the organisation.
2. Those in the organisation rely on CEOs to make final and important decisions, yet CEOs have so few sources of advice and wisdom.
Private advisory groups can provide timely knowledge about trends and the competition. They also might be able to identify upcoming political, legislative, and regulatory developments that will influence the organisation, which you wouldn’t be aware of.
When struggling with a complex decision, reliable information and strong analysis of the data work in tandem. One creates the voice; the other the echo. Without the presence of trusted advisors the voice lies fallow. This can cause the CEOs to hesitate in moving ideas to action, to second guess decisions, or to limit the number of creative solutions, especially when facing unfamiliar problems.
Private advisory groups offer an alternative. If the CEO has chosen a suitable private advisory group, members will create a sounding board of highly-skilled, knowledgeable colleagues who can help them get to the core of the issue, keep the focus on strategy, and zero in on the critical few while putting aside the trivial many. When advisors play devil’s advocate, they can force the CEO to look at a number of scenarios-a practice that will identify worst cases and best practices.
CEOs who try to brainstorm with their executive teams often meet resistance and fear because the members of the team worry about every far-fetched idea that the CEO entertains. With private advisory groups, the CEO can truly explore possibilities without causing undue angst.
3. It’s lonely at the top.
CEOs are the final arbiters of important decisions, yet they have few confidantes with whom they can share their self-doubts. Private advisory groups can help CEOs look at operations with an open mind and consider new insights about product development and marketing issues.
Organisations like the Young Presidents’ Organisation, EO and CEO roundtables have cropped up all over the world, but they offer something different. These groups provide the platform for CEOs to discuss their business challenges and opportunities, but they don’t go far enough. While members often develop strong allegiance to each other, they don’t usually devote the time and attention required to fully understand a particular business and most importantly, meetings aren’t facilitated or led by a successful mentor
Private advisory groups do better. They typically meet each month for a day or half a day to discuss issues in depth. This gives members a chance to review information and dig deeper for understanding. A YPO or roundtable simply doesn’t allow for that kind of time commitment or close analysis.
4. Most CEOs think of the intellectual stimulation and the business acumen they will experience when they begin to consider joining a private advisory group.
But CEOs should not overlook the emotional support their peers can provide. Sometimes CEOs need help making a difficult decision; at other times they require help in processing the emotions engendered by the tough call, but those in the CEOs chain of command often can’t help.
People in the organisation get nervous when the CEO expresses an emotion or doubt. They crave dispassionate, self-assured leadership, not emotional reactions. CEOs have no peers within the organisation, so there’s no one to confide in. Their peers outside the organisation frequently don’t understand their issues.
Sometimes CEOs need to hear from others who have stood in their shoes in a similar situation. They need to feel that someone truly understands the pressure they feel, the emotional drain, and the isolation. Spouses too can lend an empathic ear, but only leaders who have held the helm know the fear and danger of steering the ship in turbulent seas.
CEOs need to hear ideas about navigating the troubled waters, but they also need to feel empathy and understanding from those who can give it with genuine knowledge of how the upsetting emotions feel.
5. Finally, private advisory groups open additional avenues for the CEO.
Often members can create liaisons with those inside and outside the industry the CEO should know. We are all in the relationship business, no matter which industry we represent. People prefer to do business with those they trust or with people who come to them by way of a personal introduction.
Referrals are the coinage of business realms. They beat advertising, marketing, and networking. When CEOs invite advisors to help them build their businesses, they open the door to endless possibilities for future work and build liaisons that help them into perpetuity.
Economists and politicians continue to debate the reasons for the volatile economy and the merits of the proposed solutions, but everyone agrees on one thing: the future remains unpredictable, and this current situation may last a while. Conventional approaches won’t be enough. Smart CEOs know what got them here won’t be enough to get them where they want to go. They will need more. Private advisory groups offer one additional avenue for receiving what the smart CEO needs.
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