Avoid Your Own Echo Chamber

My client was no different than many other Small-To-Medium Businesses (SMBs) across the country. After a string of successes, the management team believed they had finally broken through and figured things out. To prove it, they did a survey of their organization to ask what everybody thought. And great news! Survey results showed they had indeed figured it out.

An outside observer reading this opening paragraph can quickly spot the flaw of the echo chamber. But reality is that when you are in one, it is often very difficult to recognize. Most small business owners have a small network of people available to talk true nuts-and-bolts business. Because of the strains on their time, those people often already work in the business or are family members. Both of those support groups want to build up the business owner because it is somebody they care about.

The challenge here, of course, is that it often takes an outside POV to be able to see the things that people inside the business simply cannot see. That said, finding somebody who can be a trusted advisor with an outside POV is hard. It takes time. And we are all well aware there are a lot of consultants out there who are really just opinionated professionals in between jobs. So, what is a SMB supposed to do?

Traditionally people would immediately move to a couple of advisors they already have on payroll, such as their outside attorney or their CPA. And to be blunt, if you do not have access to, or interest in, finding someone else, please use them and use them immediately. The concern with your attorney and/or CPA is that in many ways they are on your payroll so their objectivity is a bit more gray. Next in line, you may also speak to your bankers. Some of my best friends are bankers, so I say this while ducking, but they are trained in an entirely different way of viewing businesses. That view  often runs counter to what a SMB owner needs. So, let's think of bankers as a data point, but not one we want to put full confidence towards.

Take note. As I’ve shared with you,  there are challenges with the outside people that most SMB's have regular contact with. Make no mistake about it, avoiding the echo chamber is not easy. You must be very intentional and spend time and energy towards making your business work.

A few things you can do.

·       Find a business coach that fits your style and compliments your skill sets

·       Join an ongoing, regular training group that provides content while also providing time to build relationships with similar business owners

·       Join a roundtable group similar to EO, Vistage, Growth Coach, or Business Whyse groups

·       Get out of the office and make it a point to grab coffee/lunch with smart people you know

Any of these tactics will help you recognize echo chamber thoughts vs. objective outside point of view. All four of them require the you as a small-to-medium business owner to find help outside your four walls. (There is just no shortcut here.) Interestingly, your banker, lawyer, and CPA are all very good resources to find somebody in one of those four groups noted above.

Breaking from traditional consulting, I believe it is important to make sure that you take an ROI approach to any of these undertakings. Even in a business coaching scenario you should be able to look back on the time and money you spent and see a measurable increase in time and money coming back to you. This is not a scenario where you throw the money out so you can feel better later. This is a business investment, so treat it like one.

Let's go back to my client I referenced in the opening, and let's discuss what happened when we tore down the echo chamber.

Through a pre-planned, systematic process, I took them through a specialized financial analysis (what we at Seemore Hawk call the Cash Flywheel) to show them how money was walking out the door to find owner’s lifestyles and not the business. Later, we started to get to the underlying reasons the business had shown some success and realize that most - in fact almost all - growth was related to general growth of the industry, and not anything in particular this organization had done. And finally, we mapped out how the business was still completely dependent on debt, even though they had all agreed they were otherwise killing it and hated debt.

Over those five or six months there were a lot of eye-opening and gut-punch moments for the owners. Their opinion of themselves changed from ‘we are so smart’ to ‘our timing was spot on, let's not mess up this opportunity’. And with that change in mindset, their decision-making process shifted and, not surprisingly, they were able to be even more successful with revenues, cash flow, debt reduction, and overall employee satisfaction. The outside perspective combined with some professional real-world analysis released them in ways an echo chamber never could.