Every so often, a brilliant person, someone whose opinion you respect and intellect you admire, will give you a piece of advice or some feedback.
For example, you might be writing a business plan for a new business and ask other entrepreneurs for feedback on your plan.
Or you might be wondering how to start a business and talk to other business owners to learn how they got started and how you could avoid some of the early pitfalls of startups.
Or you might receive advice completely unsolicited from someone you barely know.
What do you do when you receive advice from others?
The general rule for entrepreneurs especially is that, when looking for advice, you take the advice. Right?
Not all advice is good advice, and even the best of advisors, the strongest of mentors, and the ablest of teachers can be wrong.
Dead wrong, even.
When considering advice, whether it is given free for completely altruistic reasons or whether it costs money, in the case of a contractor or consultant, it is critically important that skepticism be your co-pilot.
This is not to say that guidance about your business shouldn’t be listened to, solicited, or acted upon. But, you should question closely and gain a thorough understanding of the advice being given, think carefully about the implications of acting on the recommendation, and always consider the advisor’s motivation and incentives.
We have written before about some specific advice commonly given that is often inadvisable, but this isn’t about specific examples of bad advice. Rather this particular advice I am offering(!) is about determining for yourself whether the counsel is good or bad.
So be the good entrepreneur you are and approach this issue carefully and analytically.
Here is a 5-component framework that can help you determine whether business advice should be taken or refused, acted upon, or ignored.
1. Consider the source.
Sometimes a mentor is a professor at whose knees you sat, gazing adoringly upwards and hanging on their every word.
Sometimes a mentor is one of your investors or board members who is there because she had bought into your company literally or figuratively. Other times a mentor is your crazy old Uncle who taught you how to field a grounder in 3rd grade.
The point is that the first thing you should consider is who exactly is giving you the advice and why they are doing so. Credibility is key, and an advisor (whether they’re wanted or not) who does not come with much is probably not one you should put a great deal of stock in.
2. Consider the context.
The big picture, right?
You have to remove the advice from the vacuum in which it is given and apply some context. Did you seek out the advice, or was it unsolicited? Does this particular counselor have anything to gain by giving the advice, or if you act on it?
Ask yourself whether there may be a hidden agenda or ulterior motive.
As you contemplate whether to act on the advice, be sure to consider the timing of the action and whether it is right for now or it is something to plan for the future.
Context is fungible, and every business and each situation are unique, so take time to reflect on your own distinct situation.
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3.Consider the timing.
When a great piece of advice comes your way, always give thought to the timing. Not just the timing of the action you may take, but also the timing of the recommendation itself.
Are you 2 days away from launching a new product, and the advice is to change your company’s brand identity? Is the advice about certain tax matters for the fiscal year that ends in a week?
When the advice is given and when the action will be taken are critical elements in determining whether the advice is good TODAY.
4.Consider your own biases.
Just because I am inclined to believe certain information and consider it credible does not mean that it is. In other words, it is my own bias that makes me want to believe something. Being aware of this “confirmation” bias allows me to defend against its nefarious effect.
There are many biases that affect us as individuals and as organizations, and, in business, we must defend against these.
The same holds with advice: we may be predisposed to accept certain advice from certain people, and we should always, always recognize and question these biases.
5. Consider the risk.
Every piece of advice that you accept and implement will have an impact, hopefully positive, but sometimes negative. Like with any feature you add, the policy you adjust or hire you to make, the advice taken can do damage.
So do yourself a favor and always consider carefully what the negative impact could be, what the probability of that outcome is, and whether the risk is advisable.
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