Navigating the leadership labyrinth can often feel like a solitary quest. However, even the most independent and skilled leaders recognise the value of advice in shaping their decisions and strategies.

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If the first rule is humility, the second rule is: the value is in the diversity of perspectives.

Advisors come in a few different forms. They’re formal or informal. They can be internal or external. They may have legal responsibilities, ownership or be part of the team. They can be paid support or volunteers.

And they’re not just in business. Advisors provide essential perspectives and to help leaders and teams in all fields perform. The best ones bring a map of the minefield, so you know where to tread with confidence, and where to avoid. They bring experience from successes and failures that can be a short cut to success.

Bad advisors are a tax on your time and cash. They can give terrible advice which can be catastrophic.

And the worst ones are parasites, bleeding the organisation without offering much in return.

But the problem doesn’t just lie with the advisors. It’s with their selection. It’s the leader’s choice to let themselves hear, follow or be swayed by advice. The leader needs to see clearly and choose advisors with care.¹

In the land of the blind, the one-eyed man is king.

Advisors, directors, and “skin in the game”

I’m an advisor, a director, an investor and an executive. And a coach, too, sometimes. Not all in the same organisation.

Each role has a different level of involvement in the outcomes of organisation. Each role has different “skin in the game”.

In one organisation I’m a formal advisor to the Board of directors. It’s voluntary and I don’t get paid in cash. In this role the primary reward is intrinsic. The payoff is helping good people achieve impact for hundreds of thousands of people served by the organisation. When things go well I get some kudos and good feels.

But it’s not “all care, no responsibility.” My advice directly relates to my profession and experience. If I’m not diligent or if there is a bad outcome from my advice (or if I fail to give certain advice) the consequences are reputational damage. And that’s a risk for me, the Directors and the organisation.

I’m a current director and executive in a private company, and have been a director in a public company. Directors have real and unavoidable legal responsibility for everything in a company. And therefore, have responsibility for not just quality advice but also quality decisions.

But there are big differences between Director roles in private and public companies.

The public company was a not-for-profit $100 million research centre with a formal board. Directors have joint and several responsibility for the organisation. The job was to operate the centre and serve interests of the participating members and the Commonwealth of Australia, all of whom contributed funds. And, it had a fixed term in which to achieve outcomes.

The private company is for-profit, family-owned and part of a group that employs around fifty people. We do lots for Defence and the Commonwealth. Decisions about strategy affect all the employees, but the job is to be an effective steward of capital for the family owners. It’s an ongoing business without an end date.

In each of these roles the job is to give the best possible advice as you see it. They are formal roles requiring diligence, commitment and candour. The need for candour means encouraging uncomfortable conversations. And advice may not be taken – in part or at all.

My “skin in the game” for each of these roles is more than financial. It’s legal responsibility and reputational risk.

And it’s potentially existential for the organisations if the advice I give is bad.

Caveat emptor – learning the hard way

On the other hand, I also hold a leader and decision making role. I’ve learnt the hard way about choosing advisors. The lessons boil down to one thing: caveat emptor – buyer beware. I was the uninformed and inexperienced leader, buying and seeking advice.

Some lessons, not mentioning names, organisations or genders:

• At one company, I trusted a professional advisor because some colleagues knew them well. The advisor was quietly spoken and well respected in the community. They knew their profession and had decades of experience. But their commercial experience and advice was (in hindsight) atrocious. They’d never run a business or risked their own capital, and had no business advising us.
• A financial advisor to one company I led charged a fee for advice. It took me months to realise it wasn’t implementable. They were pumping out reports as “art of the possible” advice, without tailoring to our context.
• Friends and family like to provide their free advice, too. Depending on the context and the person there are some valuable pearls. But the advice is mainly driven by their own fears and care for me. Lovely, but not always useful.
• One accountant was so good we asked them to help with bookkeeping. Only later, digging through the accounts, I found about $90,000 of their invoices that had been paid without anyone approving them.
• At another company, an advisor was also an investor. Excellent advice, but given through the lens of fear of losing their own investment. They’d made great money in business before but we were learning their past success was not translatable to our business. We had to manage that fear and de-weight the advice.
• One company was advising a large organisation on technology. All the advice was to use them to build everything from scratch rather than use commercial-off-the-shelf products that delivered far greater value at a fraction of the cost.

While these advisors obviously weren’t great, there is a common denominator: the buyers. In each case the leader invited the advisor in. The leaders had the power to select or discard advisors and advice from the strategy process.

Everyone has an opinion. Not all are worth hearing.

Leaders need to wisely apply wise counsel and ignore the rest.

Heavy lies the crown

Shakespeare knew it.² Leaders make decisions and need wise advice. They need diverse perspectives to develop strategy, and explore challenges and decisions from different angles. And a leader that doesn’t seek advice is probably showing hubris.

There are a bunch of lessons I’ve learnt from both sides of the table.

1. The thing that matters most is how leaders engage.
   The leader’s job is to be discerning, to manage self, and get the best from advisors.
2. Everyone has an opinion.
   But not everyone has earned a right to have theirs heard or respected.
3. Advisors aren’t there to make you feel comfortable.
   They’re there to tell the truth, like it or not.
4. Informal advisors have no real skin in the game.
   Informal advisors are not required to perform to any standard.
5. Formal advisors have risks and other opportunities.
   If you don’t listen then they’ll go.
6. Advisors aren’t there to rubber stamp your plans.
   They’re there to find holes, and highlight better paths to success.
7. Listen to directors.
   Directors have greater duty than advisors, and real skin in the game.
8. Wisdom is tacit knowledge.
   This is understanding and know-how from experience. It’s the hardest to acquire and the difference between success and failure.
9. Failure teaches more than success, if you listen.
   Survivorship bias is real. Many “successes” are a product of different environments and conditions.
10. The future is different.
    Provenance is important but the future needs different thinking.
11. The loudest drum is often the most hollow.
    Sometimes the most value is in a few quietly spoken words, if you’re quiet enough to hear them.
12. The best advisors have humility.
    They will refer you to others who are better suited to help.
    

It starts with the leader

So, here’s what the leader should do to work well with advisors. The only real secret is that it starts from inside the leader and how they engage with advisors.

1. Manage your ego. It likes to protect itself from things it doesn’t agree with.
2. Embrace your fear. Lean into it.
3. Seek candour. Constructive truth delivered with care.
4. Seek discomfort. Challenge your status quo thinking.
5. Seek diversity. Find people that don’t look like you, who think differently and have a different experience.
6. Seek wisdom and tacit knowledge. Emphasise people who’ve been where you want to go, not where you’ve come from. And they’re not necessarily old-timers.
7. Weight opinions. Understand the lessons behind advice, and value skin in the game.
8. Avoid echo chambers. Don’t let advisors be rubber stamps.
9. Listen more than you speak. Then sift through what you hear for the gems.

It can be lonely at the top. But the best leaders all have a carefully curated team of advisors whispering the way.

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1. https://en.wiktionary.org/wiki/in_the_land_of_the_blind,_the_one-eyed_man_is_king ↩︎
2. “Heavy lies the crown…” is a misquote of the line “Uneasy lies the head that wears a crown”, from Shakespeare’s play Henry IV, Part 2. But you get the point. ↩︎