Advice Worth Taking

Aug 1, 2008 12:00 PM, By Bradley Dawson, LTV Dynamics

Why it's in an electrical contracting firm's best interest to put a board of advisors in place

The CEO of an electrical contracting firm was in the throes of a company meltdown. The recession had pinched his revenue, and his staff was becoming frustrated — with many already looking at other employment options. The CEO needed guidance from his board of advisors — a group of independent thinkers that was tasked with the responsibility for providing sage advice. As the CEO prepared to meet with his board, the only thought going through his mind was: “I hope they can help me save the company.”

All business owners need periodic advice from outside counsel. Some owners choose to discuss their issues with other business leaders in formal networking settings — with the understanding that any issue they encounter has already been resolved by at least one person at the table. Alternatively, others form boards of advisors — selected individuals that can provide guidance on all business matters — allowing the owner their independent assessment of the issues and potential resolutions. The very worst scenario is the business owner who goes it alone and does not rely on the advice from anyone.

As the owner of an electrical contracting firm, from whom do you obtain your advice? Do you use a formal process of problem analysis or informally look for answers in the marketplace, hoping to latch onto the right solution? Maybe it's time for you to form an effective board of advisors.

Do I need a board? You are not required to maintain a board of advisors. You are also not required to maintain an automated accounting system, use cellular phones, or drive a vehicle. You do these things because they make your job easier. The same is true for relying on a board of advisors.

Think about how many times in the last year you were forced to resolve a company issue. Invariably, problems arise with employees, contracts, difficult customers, banking relationships, and new competition. As an individual, the onslaught of issues is daunting — for as soon as you make one “corporate” decision, another rears its ugly head. You have a business to run and money to make. You can't afford to waste your time or make the wrong decision.

In a recent discussion with a retired owner of an electrical contracting firm, I asked him why he chose to retire so early, as he clearly had several more productive work years in front of him. His answer didn't surprise me: He indicated that he no longer recognized his business. The job had become more about company issues than his chosen profession. When he realized he was no longer doing what he loved, he knew it was time to quit.

For many, that evolution from day-to-day contractor to business owner is a difficult transition. Sure, associations try to teach business owners the rudiments of running a company but can fall short in providing the same level of expertise as they do for the technical nuances of the contracting profession. How can you expect to be a businessperson if you were never trained in the field? This is another reason for having a board of advisors.