Running a company successfully is one of the most complex challenges in life. It’s so challenging that the overwhelming majority of CEOs are failing. PwC recently found that the annual CEO turnover rate in the U.S. is 17.5%. That means your odds are nearly 90% that you will be replaced as CEO in the next five years. So, what to do? The best CEOs know they cannot do it alone. Much like top athletes, entertainers, lawyers, doctors, and other professionals, they assemble a support group. The most successful CEOs running start-ups to billion-dollar companies have at least one good advisor working closely with them. A good advisor provides:
- Gravitas. The presence of a good advisor sends a clear signal to all other constituents in the corporate ecosystem – shareholders, board members, employees, vendors, clients, and customers – that the company is dead serious about accomplishing its mission as quickly and efficiently as possible.
- Ideas. A good advisor is like engaging in a constant and continual brain-storming session. They have no sacred territory to protect, no hidden agenda, no vested interests. They are a font of ideas about how best to accomplish the mission.
- Mirror. A good advisor, one who is honest and candid, will reflect back on you and your company in a highly realistic way. Much like we need our significant others to occasionally, or more frequently, mirror back our behavior, decisions, and persona, a CEO needs the same to keep them grounded.
- Accountability. The mere hiring of a good advisor often puts top executives on notice that the advisor’s mission is among the highest organizational priorities. Executives often step up their game just with the hiring. But a good advisor does not leave accountability to chance. They work rigorously to deliver the intended result. on-time and on-budget (or better), knowing their advisory relationship will cease if they fail.
- Value Beyond Their Fee. A good advisor provides value at a multiple of their fee. Whether in terms of generating incremental or quantum revenue, saving incremental or quantum costs, otherwise accelerating growth in enterprise value, or positioning the company for a capital event, the cost of a good advisor is earned back, usually many times over.
You doth protest, with “I have a good board.” Sorry, no way 99% of boards provide the depth and breadth of what a good advisor provides. “Hiring an advisor will show weakness.” Sorry, that was a generation or two ago. This is the age of using a village. “It costs too much money.” Sorry, it costs too much money to not have a good advisor.
As you likely gleaned, the key here is a “good” advisor. At Newport, we have some of the best lower middle market advisors in the business. Check us out at www.newportllc.com/ma-advisory.