Ask Andi: Wondering if it would be useful to build an advisory board? Or would it be a distraction? How do I figure this out?
Thoughts of the Day: An advisory board can provide valuable assistance. It’s useful to have an outside perspective. Set goals for what you want to accomplish. Decide on frequency and venue. Get your documentation in place upfront. Prepare to live up to the board’s expectations.
Do I need to build an advisory board?
If you’re tired of going it all alone, one way to add a company to the table is to set up an advisory board. If you are willing to take their advice seriously, the right board members can help you to sort through, prioritize and deal with the challenges and opportunities your company faces.
Look for people who have had experience being on other boards. Ask candidates to advise you on what the board should be doing. Get them to tell you how they would run it if they were in charge.
Look for people who can think quickly as they blend together concepts and ideas. You want people who can assess situations, are willing to be outspoken and have the energy and desire to debate ideas vigorously and cooperatively. Focus on forward thinkers, who can help you decide on what to do to close current gaps in the company while simultaneously moving the company towards the next level.
Gain valuable insight, knowledge, and advice
Figure out what kind of support would be most helpful. Strategy and direction? Contacts and leads? Raising capital? How to handle employees? What to do with IT? Where the industry and competitors are going? Marketing, operations, or sales challenges? Make sure your advisors have experience with your industry, and with companies in your size range.
Look for people with a history of being accountable. They know that the advice they give matters. They think things through carefully, but don’t wait for someone else to surface issues.
Define how often you want your board to meet. Quarterly? Monthly? Know where you plan to meet. At the company office? Offsite? Figure out how long the meetings will last. A couple of hours? Half a day? Full day? More than a day? Make sure your board candidates are in agreement as to your venue and timing.
Also, think through who in your company should be invited to attend all or part of the advisory board meetings. This should not be about you presenting everything to the board. You want to give your staff the opportunity to present, question, and have access to the talented assembly of team of advisors.
Why advisory boards matter
You may have a specific employee with the potential to grow, and no one in their field to look up to. Consider bringing onto the board someone with skills in that field who’d also be willing to mentor the employee. Agree on the extent to which that board member would work with the employee on a development plan.
Insist that all board members sign NDA’s. Don’t be casual. You’re about to turn over information about the heart and soul of your company. Make sure your board members formally agree to respect the confidentiality and trust you’re extending. Have these documents ready to go as soon as you sign up board members.
Plan on a package of information to be distributed 2 weeks prior to a board meeting. Financial statements: P&Ls, Balance Sheets, and Cash Flow forecasts, are typical. Progress reports on specific departments are also useful. Someone should be assigned to take notes during an advisory meeting, and get those notes typed and distributed shortly afterward. Keep track of the next steps, who agreed to do what, and review that at the start of the next meeting.
Final notes. Be ready to take the board’s advice seriously. Plan to pay board members for participation – it keeps everyone’s attention focused on the value being exchanged. Budget time to plan for meetings, and to debrief with staff afterward.
