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Be Skeptical of Expert Advice

A major ($16 million in sales) drycleaning and Laundromat corporation recently hired an expensive consultant to offer advice about the business. The company had suffered in the economic downturn, and was looking for strategies that would help it regain its equilibrium.The consultant was one of those Harvard Business School grads who had evolved a theory about “the learning organization.” The corporation owners, two brothers, had heard the consultant speak at a convention, and agreed to pay his $25,000 fee for a week’s worth of advice.A month later, I met one of the brothers and asked him if he found the consultant helpful. The co-owner sadly shook his head, looked up at me, and said, “You know, nobody knows nuttin!”Nobody knows nuttin! I like that sentiment because it’s colorful and because it states an essential truth. Experts are all around, hawking their superior understanding. Management sections at bookstores are chock-full of groundbreaking theories. Every trade publication has columnists who offer their monthly prescriptions. Everywhere you turn, there are smart guys who will tell you what you’re doing wrong. But, basically, only you know the answer. Trust your instincts as the only true expert.WHAT’S AN EXPERT?Do you know the definition of an expert? It is composed of “ex,” which is a has-been, and a “spurt,” which is a drip under pressure.This doesn’t mean that you shouldn’t listen to people. Listen. Take in what someone says. You might even hire a small-business management consultant to offer his perspective on your laundry business. Then absorb the insights, letting them stew in your brain for a time. After this period, do what you think is right.Never accept someone’s opinion as gospel. Don’t be afraid to say, “I don’t buy it” or “It doesn’t feel right to me.” Never hesitate to buck the conventional wisdom. Only you really know your business. Only you understand how the parts of your store work, what the market requirements are, what the operational constraints are, and what you can do to make the store successful.After all, business doesn’t have to be rocket science. The iron law of business is: The inflow must be greater than the outflow. Simply, it’s inflow, outflow. The rule is the same for a solo Laundromat as it is for an international pharmaceutical corporation with offices around the world. When that immutable law is not met, one of two things must occur: sales must rise, or expenses must decrease.For small businesses, the iron law is altered to: Inflow must be greater than outflow every day, day after day. When the inflow is not greater than outflow on day two, management must act. When it doesn’t act on day two, and outflow has risen above inflow, management hasn’t done its job. Small businesses have no slack. There is no excess capital to carry the business. Management must act on the drop of a dime.Anyone with an eighth-grade education understands this iron law. An expert has no more understanding of this equation than you do. That is why there are many so-called experts. The principle is so elementary that any sort of explanation could work.RIGID MANAGEMENTA related truth is we are what we are, and we don’t change, at least not deep in our core. Let me give you an example from the consultation I mentioned earlier. The consultant argued that management was too manipulative in dealing with staffers. Management, the consultant argued, should open up and give staffers more latitude.He suggested setting goals and letting staffers work toward the goals any way they could. Management agreed that a large part of their employee turnover was due to their overbearing personalities, and decided to create a work environment that encouraged flexibility, independence, and larger bonuses for high performance.However, problems developed when some of the company’s operations underperformed. Management fretted and fumed. They couldn’t resist getting involved, yet they insisted that they were not dominating the situation.On one visit, a huge fight ensued between a store manager and top management. The store manager quit on the spot. The management overreacted, and took over running that store. Management alienated just about every employee. When other stores began to have major problems, management told their subordinates to handle the situation themselves, and the approach was no more successful.In a four-month period, four store managers quit. Business suffered, but more importantly, management felt frustrated and defeated. The general consensus was that the consultant’s advice was poorly formulated for the people running the company.How does this apply to you? Consultants can offer good advice, and the good advice can be poorly executed. The way you put any advice into practice will reflect your personality — and the result might not be what was intended. The outcome will be a blend of consultant recommendations, owner interpretation, and the situation.Whenever I think of the term “expert,” Benjamin Spock comes to mind. You remember him, the child-raising guru. There was a time when many parents followed Dr. Spock’s insights. His book, “The Common Sense Book of Baby and Child Care,” sold more than 50 million copies and was translated into 38 languages.  Yet, truth be told, Spock himself was a less-than-perfect parent. His children had, shall we say, difficult lives. At 20 years old, his grandson jumped to his death from the top of Boston’s Children’s Museum. Even Spock himself occasionally admitted that he was not the best parent. To me, one thing is obvious: be skeptical of experts.In my book, sitting in a quiet room and thinking critically and hard about your laundry is the key to wisdom. Armed with your own true insights, go forth and make your business successful. Never think that there is a magic button that will solve all your business problems. Never second-guess what you believe. Never get distracted by sideline suggestions. And never forget that, “nobody knows nuttin!” 

Have a question or comment? E-mail our editor Bruce Beggs at [email protected].