As a small business advisor, you possess a wealth of knowledge and experience in compliance and financial record-keeping. While companies rely on you to keep them within the legal, financial and regulatory boundaries, it is a rare company that outmaneuvers the competition with more stringent compliance.
Unleashing Your Potential as a CEO Whisperer
“Build an advisory practice” is a common refrain and great advice, but no one provides instructions on the “how” or the “what.” In this four-part series, tailored specifically to “CEO Whisperers” like you, we will guide you on how to elevate your services from rules-based to value-based advisory.
By steering your conversations with business owners towards the universally faced challenges of growth and profitability, you can deliver measurable and impactful business outcomes that truly set you apart in the market.
Businesses do not create and maintain a competitive advantage by merely being “better” at complying with accounting rules and regulations. While these are important, business owners do not lose sleep thinking their policies and procedures manual is outdated or a competitor having a better lease accounting disclosure.
Similarly, businesses do not fail or underperform because they lack a product or service. They fail and underperform because they have not figured out how
to identify, reach, and sell to profitable customers. Compliance-based advisory services alone cannot rescue a failing or underperforming business.
As a CEO Whisperer, your role is to help businesses answer and address three fundamental questions:
- How do I think about the business? This topic will be explored in Part 2 of the series.
- How do I manage the business? We will delve into this in Part 3 of the series.
- How do I grow the business? This will be our focus in Part 4 of the series.
In our view, these three fundamental questions must be asked and answered by every business aiming to build a sustainable competitive advantage and outperform their competition.
Part 1: The Importance of Context
Albert Einstein once wisely noted, “The framing of a problem is often far more essential than its solution.” And who are we to disagree with such wisdom?
The first step in successful advisory engagements centered around growth and profitability is to understand the context of the business situation. Assessing the business situation and comprehending the broader competitive environment are critical requirements to tailor strategies and tactics that enhance performance. An incorrect or no diagnosis will lead to misguided or suboptimal recommendations.
Join the "Catalyst For Growth: Offering Differentiated Advisory Services" webinar, June 14, 4 p.m.-5 p.m. (EST). CLICK HERE to sign up.
Credit goes to Michael Watkins for providing a framework that categorizes business situations into four broad types, each with its unique characteristics, challenges and opportunities. These situations call for their own suitable strategies and tactics.
Here is a summary of each business situation and its primary indicators:
- Startup – This situation involves businesses that are either pre-revenue or experiencing rapid growth in revenue, customers, and employees. Their products and services may be limited.
- Realignment – Companies in this situation face stagnant revenue growth, profit erosion, and the customer churn rate is equal to or greater than the customer acquisition rate. They underperform compared to their competition.
- Turnaround – These businesses experience declining revenues and profits, net losses, talent attrition, and the loss of key customers. The customer churn rate exceeds the customer acquisition rate.
- Sustaining Success – In this situation, companies experience consistent revenue and profit growth. The customer acquisition rate exceeds the customer churn rate. They have a healthy mix of products and services with a pipeline of new and innovative offerings.
It is evident that each of the business situations presents distinct challenges and opportunities concerning growth and profitability. The priorities for a turnaround situation greatly differ from a startup situation or other situations.
As a trusted advisor and CEO Whisperer, recognizing and understanding the specific business situation allows you to objectively convey the reality to the business owner and leadership.
By framing the situation and core problem accurately, you can ask penetrating and insightful questions that address the challenges keeping the CEO up at night, such as:
- Does the CEO or owner recognize and agree with the business situation assessment?
- What are the most impactful external factors that have influenced and continue to influence the business situation?
- Is the leadership team aware of the business situation and are they aligned on the need for action?
- What critical information does leadership need that they currently lack?
- Can leadership clearly and concisely articulate why customers should choose their product or service?
- Does leadership understand the reasons why customers choose their product or service over a competitor’s offering, and vice versa?
These questions represent just the beginning of shifting your conversation with business owners from a rules-based mindset to a value-based approach focused on growth and profitability. Embracing this approach will differentiate you in the market and increase your own value to business owners as a CEO Whisperer.
Peter Mares co-founded G76 in 2021, at the height of the pandemic, to help middle market companies not just survive, but to thrive. G76 brings Fortune 500 “big data” analytic capabilities tailored specifically to the middle market to help companies grow profits and sales from their existing customers. His career highlights include founding two practices as a partner at the global accounting firm KPMG, and holding executive and C-level positions in global, mid-market and small businesses. He is a CPA with an accounting degree from James Madison University and received his MBA from George Washington University. Peter and his wife, Kimberley, live in Pennsylvania and stay connected with their seven (yes, seven) children spread out across the country. Peter is also an advisor to businesses and start-ups through the Executive Leaders for Advisory Boards.
Like what you're reading?
Subscribe to our FREE newsletter and we'll deliver content like this directly to your inbox.