It's been a few months since Dan Price, the 31-year-old CEO of Gravity Payments, unveiled a controversial plan to pay even the most junior employees on his 120-person staff a minimum salary of $70,000. And while it's too soon to tell if the plan will succeed long-term, the response to it was immediate and overwhelming.
It's been reported that the salary spike has led to both positive and negative outcomes at the company. On one end, many employees are pleased with their salary increases, and the publicity brought in new business and job applications. On the other, two of Price's most valued employees quit because they resented receiving much smaller raises then some new hires in order to accommodate the new plan; and some clients who were either concerned about rate increases or viewed the move as a statement against capitalism took their business elsewhere.
With all the buzz, backlash and attention now surrounding Gravity Payments, many are wondering how Price decided to roll out this new plan, and who is advising him to ensure his success. As a CEO myself, I'm particularly interested in his process. Though he's coming from a noble place of wanting to improve upon economic concerns, he - like all entrepreneurs - still needs formal advisors, and I was curious about who he regularly turns to for advice.
When I spoke with Price, he said that he does not have a formal advisor, but he said that he did seek out insight from others when he was creating his new initiative. "I had a lot of conversations with people at Gravity, clients of ours, my father and brother who are business consultants, and with about 20 other CEO's," he said. "I'm looking at working with a formal advisor as a part of my process for the future and I often reach out to those in my network that have specific expertise and seek their insights," Dan states. "I think if I could do it over again, I'd have even more of those conversations because I think they're valuable."
The truth is, our peers, friends, family and staff can provide helpful insight, and you don't want to discount the importance of their advice. But, you also want to seek out formal trusted advisors who have a deep understanding of your business, along with the wisdom you need to compensate for your blind spots.
As entrepreneurs, that's the kind of guidance we really need -- people who have no motives other than to make sure we succeed. We need people with varied points of view who are well equipped to help us prepare for the big moves that will significantly impact our businesses. We need people who are committed to helping us arrive at sound decisions that guide our companies to healthy and profitable futures. In short, we need trusted business advisors.
This is true for you, me, Dan Price and every other entrepreneur. In fact, as Marcus Lemonis of CNBC's "The Profit" recently told me, "If you examine any successful entrepreneur, they typically have one thing in common: an advisor. Nearly every successful person in history had someone who they could confide in and learn from."
Working with an advisor often leads to success. For example, Howard Schulz, Founder and Chairman of Starbucks, built his company on the advice of leadership guru Warren Bennis of USC. Netflix Founder and CEO, Reed Hastings, steered his company based on Jim Collins' teachings. And Warren Buffet learned how to analyze business from his business partner, Charlie Munger.
Throughout history, we've seen that the most successful people aren't afraid to ask for advice from experienced and trusted advisors. I would argue that these advisors are a tremendous part of how they've achieved such great success. So, why don't more entrepreneurs follow their example? Is it the American culture of independence that inspires entrepreneurs and business leaders to "go it alone," rather than seek out sound, strategic advice? Is it not knowing how to ask for help or does seeking advice seem to require too much time? Is it an unwillingness to be vulnerable and appear weak, or to let a perceived outsider get too close to their business? Or is it ageism bias, where entrepreneurs think the experienced advisor is out of touch with current trends and doesn't have anything to offer?
Whatever the reason, it's time for change. When seeking out advisors, I recommend looking for people who:
- Possess a deep understanding of your industry, and have achieved success in a key area that you may be struggling with.
- Are connected and have a willingness to share those connections.
- Have your back. Their only agenda is to help you succeed. (This likely requires a meaningful incentive to ensure they have a vested interest. For example, paying them through options, dollars or another mutually beneficial arrangement.)
- Are able and willing to help you. Don't chase the big guns who won't take the time to offer guidance. Your advisors need to be there when it matters most.
- Know when to step in and help, and when to give you space to make the right decision. You also want advisors who will be comfortable with the fact that you won't always take all of their advice.
- Always have you near the top of their priorities, and are constantly searching for ways to add value and help you succeed.
- Have diverse points of view that compliment your weaknesses. This ensures you're getting well-rounded and comprehensive feedback where you need it most.
I also recommend creating an employee advisory committee to stay attuned to what motivates your staff, so you can be sure your decisions are in alignment with their needs. You may want to consider a customer advisory committee as well, to make sure you know what your customers want and can anticipate their response to certain initiatives. In Dan Price's case, this may have helped him to unveil his plan in a way that got all of his customers on board, rather than losing a few and having to win them back.
In the challenging role of entrepreneur and CEO it's also important to remember that just because you have trusted advisors, you're not required to take their advice. As Captain Kirk once said, "One of the many advantages of being a captain...is being able to ask for advice without necessarily having to take it." But seeking their guidance ensures that you have a more full picture.
Do I believe a formal strategic advisor would have steered Price in another direction? Perhaps. Or, maybe they would have provided him with key insights to minimize the backlash and negative attention. We'll never know for sure. But what I do know is, social entrepreneurship is on the rise, and I say rock on, Dan Price, with your bad-ass self! Congratulations on actively standing up for what you believe in and working to fight income inequality.
In a final salute to your success, I encourage you and every other CEO and entrepreneur reading this article to consider consulting with formal trusted business advisors who can help you succeed.
Jennifer Love is the Business Navigator + CEO of Entrepreneurist, an advisory and digital education platform to help entrepreneurs get funded, increase sales, and maintain sanity. Read more at JenniferLove.com, or follow her on Twitter at @JLoveBiz.