Your Advisory Board

“To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of disciplines.” ~~Steve Jobs RIP 10/5/11

You may have heard that business owners wear many hats.  This is very true.  It requires a lot of different skills and activities to keep an enterprise humming and thriving.  We all bring various competencies to the equation—both business-related and personal.  For example, one person may be a good marketer, excellent father, decent driver, and terrible golfer.  They can’t sing but write well.  This composite individual has strengths and weaknesses.  In your business (as well as in personal relationships) weaknesses can be crippling and even fatal.  Understanding that, you can appreciate the value of an advisory board.

This is a group of peers—fellow-business owners—that gather regularly and discuss pertinent issues.  They bring expertise and experience into areas you are lacking and you can offer the same to them.  Theoretically, seventy-percent of all business is the same while most of us only think of the thirty-percent that differentiates them.  You would hardly think of an auto repair business, financial planner’s office, and chiropractor have much in common but they all deal with finding new customers, servicing accounts, billing, tax preparation, hiring, insurance, website selection, and countless other similar details.  When someone has already mastered the process of accepting credit cards, for example, the other members can benefit from that knowledge.

In some cases you can join an existing advisory board.  In others you can start your own.  A good middle ground is a mastermind group.  These are similar to business networking groups except that the focus is on sharing ideas rather than mining for referrals.

The best advisory boards will challenge your pre-conceived ideas and highlight soft areas.  They can be uncomfortable yet invaluable.  Some are very hands-on while others are more visionary and big-picture-centric.  Some meet monthly and some meet quarterly.  Some meet in person and others in more virtual settings.

Ivan Misner in The 29% Solution quotes business strategist Geri Stengel regarding ten effective tips for creating an advisory board, summarized below:

1. What is the objective of your board?  Will this be an industry-specific group or more generalized?  Will it be a hybrid (business-to-business or homeowner-centric, for example?)  Will it be regional, national, or larger?  Will it include customers?
2. How do you choose the right people?  Understanding the purpose is one thing.  Further defining the level of expertise, business size and maturity, etc., is another matter, as well.  Whatever metric you define, be certain to consider “people skills” as well.  Look for willingness to share, problem-solving ability, communication proficiency, and so on.  Some boards love to recruit celebrities and a big name adds some allure while also opening the door for powerful introductions but don’t just gravitate to that if it is not a fit in the other areas, as well.
3. What are your expectations?  Be clear about time commitments, responsibilities, desired results, and all the rest.  The clearer you are about the strengths and weaknesses of your current board make-up, the surer you will find the right person for the right reason that will stay.  If your board will consider private matters have a confidentiality agreement prepared.
4. What is the compensation?  Certainly involvement has its own rewards.  Decide on food, expenses, stock options, and cash payments, if any.
5. How will you maximize the experience?  Carefully consider the logistics and prepare agendas ahead of time.  If prior knowledge of a topic is needed, deliver that ahead of time.  End every session with a recap of the action plans and facilitate the process.  Ideally, recap each meeting for all attendees (perhaps all members.)
6. Honesty is the best policy.  As mentioned above a strong advisory board will be challenging.  Every member should share their own mistakes, especially in the early formative sessions.  This builds rapport and provides a framework for trust.  Honesty may put you in an uncomfortable situation as the probing questions uncover what you don’t know, never considered, blind spots, and so forth.  Keep the conversations frank and yet not personal attacks.
7. How will you deal with the time/distance gaps?  Meeting often drives momentum yet can burn members out.  Meeting less often can lead to drift.  Defining these expectations and finding suitable methods of between meeting communication is important.  Emails, wikis, listserves, shared websites, and so on provide useful ways to move ideas along erratic schedules.  Some members will access this late at night, for example.  It is also useful to assign sub-committees who meet on specific topics at their own schedules and report results at the regular sessions.
8. Will you respect the board recommendations?  Everyone’s time is important.  Do not monopolize the floor, for example.  Conversely, when something needs to be said—do so.  Listen to the advice given and consider your own actions.  You will ultimately live with any decision, so there is no need to rush.  That said, respect the advice, share your decision, and share the results.
9. How will you keep board members informed?  You may in time find the advice was correct and now will be talking about how to repair and restore.  You may find that new areas of opportunity or concern have cropped up.  You may simply find that things are moving according to plan.  Briefly updating your advisory board is important.
10. How will you deal with problem members?  Set a structure up that enables you to deal with the inevitable issues that arise.  Be certain to consider legal challenges, as well.

Who might you want to seek out for an advisory board?  Here are some areas to consider:

• People in your profession.  This includes current professionals as well as prior specialists.  There are benefits from both areas.  Active experts have current technology, contacts, regulatory knowledge, and more.  Former wizards bring different depth, too.
• Outside observers.  These can include regulators, authors, and business consultants.
• Members of similar or related professional organizations like trade group people.

This is a large, significant area and sets the tone for your 2012 focus.  Your action this week is to start planning your advisory board.  I am including a link to Geri Stengel’s website here as an idea factory.  Start fleshing out the answers to the ten questions above and solicit feedback from those you respect.

© 2011 by Stephen Hand of Triangle BNI.
All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of Stephen Hand of Triangle BNI.