The Value Exchange - How to get (and give) valued advice.

Louise Broekman, Founder - the Advisory Board Centre

When faced with making a decision or navigating an unknown path in our business journey, we instinctively look to others to support our thinking. For many business leaders, this includes a “sounding board” style conversation with trusted peers or advisors.

From my personal experience, meaningful advice at the right time can change people’s lives. It did for me. Reflecting on the moments where advice was given (the advisor) and how I received it (the advisee) provides me with a small insight into what I term “the value exchange.”

Advice is meaningful when two things occur: the exchange creates new value, and the advice is valued. Both parties trust the exchange which leads to an increase in confidence in the advice.

Understanding the dynamics within the moment of the exchange between the advisor and advisee is a complex task, because there is a lot going on!

THE CURSE OF “ON-DEMAND” ADVICE

Picture this: you arrive at a meeting, are provided a broad synopsis of an issue and the advisee expects you to have a solution on the spot. Is this realistic? Definitely not. Is it common? Absolutely.

The advisor, in trying to help, falls into the trap of the “advisor’s curse”: trying to be the smartest person in the room and fix the problem on-demand. The issue is likely to be complicated, has layers the advisor cannot see, and it is likely wrapped in emotions. So how do you break the curse and move off the advice rollercoaster into a true value exchange? The first step is to reframe expectations on both sides from on-demand “fixing” to collaborative advising.

Skilled advising has been described this way: It is more than the dispensing and accepting of wisdom; it’s a creative, collaborative process – a matter of striving, on both sides, to better understand problems and craft promising paths forward. In other words, it is a Thinking System.

THINKING SYSTEMS TO SUPPORT VALUE EXCHANGE

Identifying the situation (the why) informs the type of advice structure required (the what). We see within an advisory board setting two common systems for advice. When a problem or situation requires specific expertise and recommendations from a knowledge source – logically it is an Expert System.

This is quite different in an environment where there is no single correct answer. Advisor Systems provide the space for exploratory debates and robust conversations to occur. The purpose is to build confidence in choice when there are various options to consider.

Advisory boards are the most common advisor system. Research reinforces the link between an advisee gaining independent advice from multiple sources and quality decision making. The Advisory Board Centre Global Research Council identified that accessing an advisor system like an advisory board enhances business owners’ confidence by over 30%.

CREATING AN ENVIRONMENT OF CONFIDENCE

At its core, the purpose of any advisory system is to build the confidence of the advisee in the decisions they make. Confident decision makers consider three factors: the available information, the advice received and their own ability to execute. Creating an environment to actively explore all three factors is important in an advisory board setting. There are no idle passengers, and everyone has a role in creating value.

The Advisor – Advisors must elevate the conversation from recommending what a business “should” do, to exploring the options of what a business “could” do.

The Chair – Managing internal representatives and external advisors at the same time, requires skills and insight. Chairs who can adeptly facilitate conversations from generalist to specialist amplify the value generated in an advisory board.

The Decision Maker – Decision makers have to consider their own opinions and deal with personal bias when evaluating an advisor’s point of view. Decision makers must consider their own ability to take on the advice provided, make a decision and lead the execution phase within their organisation.

BEST PRACTICE FOUNDATIONS

The most dynamic aspect of the Value Exchange when done well is the concept of regenerative value – with each conversation building on the next to continue to generate new value. Without the right foundations in place the exchange is broken, and the potential value is unrealised. The ABF101 Advisory Board Best Practice Framework has an important role to play. Advisor systems, when applying best practice principles, amplify the value exchange and in turn, confidence in the way decisions are made.