Posted on: 09 April 2015
Small businesses with big growth ideas don’t ever achieve their dreams on their own. They work with all sorts of stakeholders to get help, advice and guidance. In our recent articles about the power of mentoring, we explained why we believe mentors are key stakeholders in ambitious small business.
Let’s say you agree with us. Let’s say you have hired the services of a professional mentor for some time and you feel like they have added value to your business.
But how can you be sure?
Rockstar Mentoring Group was founded by Jonathan Pfahl, an ex-Goldman Sachs Wealth Manager. Rockstar’s focus is on delivering value in the form of helping its mentees’ businesses achieve and exceed their financial objectives.
We asked Jonathan to explain a bit more about how a business can work with a mentor and leverage off their experience and contacts in order to achieve them.
“A good mentor will be able to assess the validity of your goal and have a very good idea of it being achieved within a typical six month period,”he says. This is a useful timeline to keep in mind as it focuses both your attentions on the end result. If you have found the right mentor and know how to get the most out of your relationship with them, this should be a straightforward process, allowing you to concentrate on what needs to be done to realise it.
There are three facets to the value a mentor should be bringing to your business: strategic, operational and financial.
The key to making your relationship with your mentor work is to outline the strategy for the business first.“We usually outline three to four key strategic points in the first meeting that the business owners will achieve with our help over a certain period of time,” says Jonathan. “Both mentor and mentee get the most out of their time together if they are agreeing to clear strategies and how to achieve them step by step and month by month.”
Measuring actuals against strategic targets will enable you to specifically measure the difference your mentor is making, and therefore the return you’re getting on your investment in their services.
“Operationally, the mentor needs to review all key areas of the businesses' operations,” explains Jonathan. “That helps them identify where the problems are.” The mentor’s focus should be on enabling efficiencies and it is also their role to identify how operations need to be changed. However, it may not be their role to explain how to achieve that, in which case they should be recommending someone who can.
Operational value can be in the form of time as well as money. A mentor can help you use your time better, whether it be by ensuring you make time to plan, helping you distribute your responsibilities more around your team or by simply helping you know when to say ‘no’. They can add the same value for your team, for example by showing how a restructure of your shift pattern could make more efficient use of the skills of your team.
Return on investment is all about getting back more than you put in. With mentoring, Jonathan believes this should ultimately come in the form of profit wherever possible.
“I think when it comes to this type of mentoring, the most valid way to measure the impact is financial,”suggests Jonathan, “either by the increase in money made or the increase in costs saved. Both lead to an increase in profit.”
Setting realistic profit targets at the start of your mentoring relationship and reviewing how the mentor’s involvement has helped you achieve them can do this. This will be a subjective exercise to a degree because other variables will also have impacted your results. However, if you have planned how you are going to work with your mentor and linked their involvement with your original goals, it will be obvious if what you pay them was money well spent.
“The only exception to this rule,” says Jonathan, “is when a client requests help with a specific area of its operations such as improving team morale and getting the best out of the team. In such an example, the measurability is tracking their performance thereafter.”
So if you’ve had a mentor for more than six months, it is worth taking stock of how their input has affected your growing business’s profit. If you can see how the money you have spent on them has enabled you to achieve your objectives, the relationship is working. If that link is difficult to justify or isn’t there at all, it may be time for a change.
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