The Entrepreneur: Two heads are better than one
This month Andy Raynor explains: How the most successful entrepreneurs borrow the experience of others.
It's often said that the life of an entrepreneur is a lonely path to tread and it's not hard to find entrepreneurs who have reached success and agree with that. Whilst this walk of life this calling - attracts special people who are firm, disciplined and focused to the point of obsession, there can be real issues in the absence of close, sympathetic, objective input.
We only know what we know... and yet the day to day of entrepreneurship is in facing challenges, dealing with opportunities that have never been seen before, and then boldly venturing into what is, to you, the unknown. Reinventing a response that has been tried and tested elsewhere could be an expensive mistake.
Whilst an adviser might help, there are limitations. Most advisers are professionals and simply don't have the entrepreneurial experience that drives you. But they do have access to other clients that have been there, have done that. Experience is more valuable than advice.
This isn't a failing, it's a fact. Your knowledge, however deep it may be about your particular opportunity, is bounded by your own experience. Bluntly, you don't know what you don't know. Seek out someone who has been there before who can help.
This mythical being, this navigator to help you steer safe passage in new territory, has several incarnations mentor, confessor, non-executive director. By far the most productive longer term relationship comes from the last of these. So, who is a non-executive director and how may they help you?
Here are five essential characteristics of a non-executive director... see if you could benefit:
- A non-executive should be able to "tell you in minutes what you may never otherwise learn". This expresses best what a fruitful non-executive relationship can bring breadth of experience, perspectives and contacts;
- A good non-executive will have sufficient knowledge of the nature of the business and people he is to assist, but will maintain the ability to keep above the muck and bullets of the day to day, seeing the priorities clearly;
- He or she will be patient and willing to learn, but unafraid to speak out and always ready to justify their views;
- A non-executive should be expected by all partners, owners and managers to provide a view which is unbiased by any personal or historical factor. He or she should apply knowledge objectively and always be able to demonstrate this impartiality; and
- A non-executive is not a touchline judge. He or she should be ready to participate on behalf of the business to protect and further its interests. This is more than simply sharing an address book it is the willingness to become a buffer, a broker, a trouble-shooter; to take the initiative in the inevitable situations where impartiality and independence are valuable currency.
Businesses that find such benefits early in life can accelerate their success, short-circuit process and avoid pitfalls. But if you want a non-executive, where do you find one and what should they cost?
Let's take that last point first they may not cost you anything, yet, and they may even bring a whole lot more than we've set out above. Whilst most non-executives will look for a manageable fee, many will also be willing to roll this up into an investment in your business, may invest more and may bring others to the table, too. There's a long history of non-executives using their firepower to help in funding and if they do, they're even more willing to contribute.
So where do you look? There are a small number of experts in this field, and we'd be happy to help you find them, and also to suggest some sources you may use out of your own contacts, too.
For most, the perfect non-executive is probably closer than you think.
Andy Raynor authors the blog "Beyond the Brief" which can be found here.
For an example of how RM2 can help non-executives acquire tax-efficient equity in their portfolio client companies see here.