Starting up, running, growing and exiting a business are all new experiences for those on their first entrepreneurial journey. It comes to no surprise that at some point while venturing into the unknown entrepreneurs seek to learn from experienced professionals. This article clarifies the difference between advisors, coaches and mentors, and the type of help they can provide to a business and the people working within that business.
Let us start with defining each role in more detail:
Advisors are hired because of their subject-matter expertise in a specific domain or the segment of business. They provide professional advice in a proactive, prescriptive and directing manner, telling you what to do to achieve your business objective in the short- or mid-term. Naturally, advisors are performance-focused, hands-on, and their payment is associated to the delivery of a business result.
Coaches are hired because of their process expertise. They usually have a general business understanding, and will offer proactively an outside-in perspective. Listening and empathetic, they focus on helping a business and the people working within that business learn how to achieve specific goals through discovery and skills development. Their engagement horizon is mid- to long-term and their remuneration is associated with the delivery of a self-sustainable business- or people capability.
Mentors are matched, not hired. They are accomplished professionals who offer wisdom and a combination of personal and professional advice. In general mentors are reactive. When triggered, they will respond with guiding and motivating rather than doing. Mentors think long-term, building a relationship aiming to enable personal growth and development for their mentee. Purpose-driven and altruistic, they will expect no payment in return for their work. The creation of legacy is their measure of success.
Advisors are best to tell you "what" to do and coaches "how" to do it. Mentors will focus on helping you understand "why" your choices matter. In this context, your desired outcome and respective time horizon are the key selection criteria. Here are some specific examples to illustrate this:
Having decided whether an advisor, a coach or a mentor is who you need, it is also important to consider additional "soft" factors. Our experience shows that advising, coaching and mentoring are most effective when the people involved have a basic degree of alignment in values, personality and character traits. The phrase "basic degree of alignment" is key: expecting more than that can jeopardise the positive effects of diversity and new ideas an advisor, coach or mentor can bring. If you do not know how to test for those soft factors, common sense is the best approach. At Neos Chronos, for example, we would never engage with someone - however competent - if we cannot assert their purpose, cannot sense their integrity, and do not feel we can trust them.
Let us discuss some common questions (we will update this section as comments arrive):
Whether a startup or a large enterprise, board advisors are commonly appointed to add credibility and industry reach to a company. Their connections can often help accelerate growth. Board advisors are commonly present at board meetings only, and have no short-term business objectives assigned beyond their active participation in those meetings. In startups, board advisors are remunerated on an equity-basis. The Founder Institute's FAST Agreement is a great place to acquire further insights into engaging a board advisor.
There are significant differences between advisors and consultants, the most prevalent ones being that a) an advisor delivers towards a business objective, whereas a consultant delivers a work package and b) an advisor will act proactively, whereas a consultant will be directed in / tasked with the work to be performed.
At the time Neos Chronos was founded in 2013, we chose our tagline "Advise. Demonstrate. Inspire" to document our decision to deliver in a way that would make our clients capable to leverage and further enhance the benefits of our work beyond the "delivery" date. Our journey has confirmed that advising with purpose and demonstrating integrity inspires trust. In this respect, we regard ourselves as advisors, coaches and mentors at the same time, and our sales model is fully aligned to support this way of working.
In this article we looked at advisors, coaches and mentors and the type of help they can provide to a business and the people working within that business. Advisors are best to tell you what to do and coaches how to do it. Mentors will focus on helping you understand why your choices matter. Deciding on whether to engage an advisor, coach or mentor is best done using the desired outcome and timeframe, as well as soft factors such as basic alignment in values, personality and character traits.