Why External Advisors See Risks That Insiders Miss

Running a business from the inside often feels like navigating a storm with limited visibility. Leaders are immersed in daily operations, focused on putting out fires and driven by urgent priorities. In this environment, it is easy to overlook risks that could derail long-term sustainability. This is where external advisors play a critical role: providing clarity, objectivity and perspective that insiders often cannot see.

Why Insiders Miss Risks

1. Tunnel Vision: Leaders often focus on immediate goals - sales targets, investor relations or product launches - leaving little room to identify strategic blind spots.

2. Emotional Attachment: Founders and executives are personally invested in their businesses. This passion can cloud judgment, making it difficult to see weaknesses or threats.

3. Cultural Blind Spots: Long-standing teams may normalise inefficiencies or risks because “that’s how we’ve always done it.”

4. Information Silos: Different departments may hold critical insights but fail to communicate them, leaving leadership unaware of brewing challenges.

The Value of External Advisors

1. Objectivity: External advisors come without the baggage of internal politics or legacy habits. They see issues for what they are.

2. Breadth of Experience: Having worked across industries and business types, advisors recognise patterns and risks that insiders may never have encountered.

3. Governance Perspective: Advisors align risks with compliance, governance and regulatory frameworks, ensuring leaders don’t miss red flags that could have reputational or financial consequences.

4. Scenario Planning: Advisors stress-test strategies and ask “what if” questions that insiders often avoid - helping businesses prepare for crises before they arrive.

South African Context

In South Africa, the stakes are particularly high:

• SMEs face a failure rate of up to 80% within five years often due to governance gaps.

• Boards and executives are under increasing pressure to comply with King IV principles and B-BBEE requirements.

• Political and economic volatility create external shocks that insiders rarely anticipate but advisors can help prepare for.

Ignoring these risks not only affects profitability but can also compromise an organisation’s reputation, contracts and long-term survival.

My Perspective

I believe leaders should not wait for crisis to seek advisory input. External perspectives are not a threat to leadership - they are a safeguard. By inviting in objective, independent advisors, businesses strengthen their ability to see risks early, seize opportunities faster and protect the legacy they are building.

Insiders are invaluable for passion and execution, but advisors bring the clarity and foresight needed to see the full picture. Combining both perspectives is how businesses remain resilient, competitive and future-ready.

At Kulima Capital, I partner with leaders to uncover blind spots, strengthen governance and align risks with growth strategies. As a world-class African millennial, Masters-level, entrepreneurially experienced female advisor, I bring independent insight and cross-sector experience to help your business stay ahead of challenges and build lasting resilience.