Getting to the Right Question Is the Real Challenge
by Kevin Brown
Something I have learned over the years while advising my clients who run their own businesses is that getting the right answer is not the hardest thing, it is asking the right question that is usually the real challenge. Without first defining, determining, or understanding the real goal and objective, any answer will likely end up being the wrong answer. Often, we can focus on the answer first or put too much significance on the answer to the point where we look past the real question that addresses our needs.
Let me expand on this a bit more with an example. A client once asked me to come and speak with them about pension planning. I was happy to talk with them about pension planning as I think that has great, financial, business, and tax benefits. But as I talked with them and asked several questions it appeared to me that pension planning wasn’t the real issue or question that needed to be answered. Their real business need was far more complex.
The actual business situation was that there were multiple owners, and a few were looking to transition out of the business. When I proposed that business transition was the issue they were trying to address, they all agreed. I could have discussed all the benefits and options for pension planning and even helped set a pension plan up, but that wouldn’t have helped them accomplish what they really were trying to achieve. Ultimately, what they really wanted to do was start a transition for some of the owners out of the business.
The Lessons I’ve Learned Over the Years of Advising Clients
The lesson I learned is that we can often focus on good financial, business, or tax options as they can appear to be the answer to our needs. While an idea or program may be a sound business decision, without aligning it to the desired goals and objectives of both the business and the business owners, it can end up being another program or product that you need to manage and not the real answer to your needs.
So, what I encourage my clients to do is to focus first on what they want to achieve or what they are expecting in the short-term and the long-term. I also really dig deep on what the real question or issue is, and of course, encourage owners to talk with people they trust to help you focus on the real question. A proverb says, “Plans fail for lack of counsel.”
The goal should always be to figure out how to ask yourself the right questions. But having an answer and then deciding what to do are two different things. Most answers to tough questions are not always clear-cut, or more importantly, they will not always guarantee the exact result you are trying to achieve. So, we can sometimes hesitate to make the decision related to the answer we have found, stick with the status quo, or just put it off (I have certainly done this). Most business decisions (heck most any decision) will ultimately come down to accepting some level of risk or taking a leap of faith.
The Key Questions to Get to the Right Answer
Asking the right questions so you can come up with the best answer is key to this discussion. The following questions, which I refer to as the 3W’s, are a good starting point to help you drill down on the real issue at hand:
#1: The Why
Asking why? is a great starting point for drilling down. Why do I want to buy, sell, invest, etc.? I have asked a lot of clients why they want to sell their business and a lot of answers come back; I am tired of running the business. I could stop there and say I understand so let’s look at how to sell the business. However, I then ask why are you tired of running the business? I want to dig down to the real reason they are tired. I also dig into what they still like about the business and what they plan to do if they sold the business. It may be possible they still enjoy certain parts of the business and maybe there are other options available instead of just selling it. Having options available for any issue or problem is always good.
#2: The What
Understanding what my client is trying to achieve is critical to getting the right answer. In essence, what is the end result you are looking to achieve? This will help to avoid trying to “see the forest through the trees.” In the example of a person tired of running the business, if we stay focused on the idea of being tired, we eliminate addressing options that may also be available.
#3: The When
When does this need to be accomplished? Is it short-term, long-term, etc.? I have noticed that in business dealing we get tied up with the more immediate needs or issues and can set aside the longer-term issues. However, today’s long-term issues are tomorrow’s short-term issues, and tomorrow usually comes quicker than we think. Business transition and estate planning are two good examples of issues many business owners are concerned with but don’t address. This often ends up with the business owner not having the best options available or getting the best outcome down the road when the time to act is upon them.
I believe if we start with these 3W’s, we can get closer to determining the real questions business owners have regarding their companies and have a much higher likelihood of achieving what they really want to accomplish. Of course, RBTK is always available to help you determine your real questions.