They say it's lonely at the top, but they don't always explain why. The reasons become obvious pretty quickly when you're putting in 90 hour work weeks, the sole arbiter of expertise and perspective and you can't work any harder than you already are. So, it's time to worker smarter, and gaining the advantage of an incredibly smart Advisory Board can hardly be beat. They may literally be worth their weight in gold.
If you are thinking of advisory boards as dilettantes or retired business people with nothing else to do who prattle on saying nothing original, it's time to rethink the benefits and create a board that will offer you full support, great ideas and sound advice.
What will an advisory board offer?
It will give you a new perspective. Yes, you are wildly successful. But you don't have a monopoly on good ideas, and there are times you can't see the forest for the trees.
Because when you get successful, you tend to get into a rut. The board can help challenge you to try new things.
Because they give you an immediate set of reliable peers to discuss problems you face. That is no small thing.
Because they can provide honest feedback, when your subordinates my "yes" you to death, and cause you to lose your edge.
How do you go about putting together an effective board and how should it function? Let's take the questions one at a time, beginning with who you want on your board.
You want smart, creative problem solvers who have a proven track record of success. Sounds obvious, right? If you think about the advisory boards you are aware of, you will realize that this approach is not always followed. The people on the board should NOT work for you. No employees. And you don't want your banker, lawyer, or accountant on the board either. They have an extremely vested interest in telling you things you want to hear. (They want to keep their retainers.)
There should be diversity in the truest sense. You don't want to have someone on the board just because they tick a box. But if you are in your 40s, you probably do want someone in their 20s and someone in the 60s on the board. Singular demographics won't give you the diversity you need; so not all women, and not all men either. You want geographic diversity too, don't isolate yourself to only having people who have always lived within 100 miles of one another. Having people of different temperaments gives wider options too; aggressive risk takers and extremely conservative folks should each be represented.
Must they be from your industry? No. Most business problems-hiring, distribution, cash flow, and marketing are universal. If you are in the technology industry and you insist on only having board members from the technology sector, you are needlessly isolating yourself. If they are not from your industry, aren't you limiting networking possibilities? Probably not. You'd be amazed how many contacts and resources successful people know or can get to.
How many people should be placed on an advisory board? Fewer than six and you won't get enough ideas, but more than eight and the meetings become hard to control.
Do you have to pay these folks? Sometimes, yet, not always. It depends upon the size of the business. Often you can offer stock options and/or equity, but someone who has never served on a board may do it to gain the experience. Contact Global Directors, LLC directly to discuss the process and recommendations that best suit your business model.
How do the meetings work?
The general advice is that you want to meet quarterly. More frequently, and the board gets caught up in the day-to-day running of the place and less frequently gives too much time for small issues to become big ones. The logic is right, but you can get away with having three meetings a year instead of four.
At the meetings you need to do three things as a matter of course:
First, you deal with business issues. (Sending out an agenda ahead of time is a good idea so your board members can think about the issues that are going to be discussed.)
Second, you want to have some kind of formal mechanism to facilitate mentoring of your top people-and yourself, by the board members.
Third, some sort of team building exercise for the board is very valuable. It can be as simple as everyone having dinner together or a more formal orchestrated event held at a resort that you'll all attend together. You want to turn your advisory board into a high performance team; in the same way you are looking to turn your employees into a high functioning team.
It's important to be clear that you want your board's feedback and ideas but you aren't required to take it. You get the final call. Still, when the board is constructed in the right way, they can be a valuable source of ideas.
When you begin searching for quality members or looking to put together a board of advisers please make Global Directors your first telephone call: 650-305-9543. We are the industry leaders in this marketplace.