Through the years, I have done a lot of mentoring of high school students and young adults. It is one thing that I enjoy doing the most. And one of the biggest pieces of advice that I give them is to “collect old people.” By that I mean gather a group of advisors who have been where you are headed and know the roadblocks and pitfalls that lie ahead. While this may seem like basic wisdom in life, many companies fail because they don’t have the proper advisors in place. I am reminded of what Proverbs 15:22 says, “Plans fail for lack of counsel, but with many advisers they succeed.”
Assembling a group of advisors to help guide your business may not be easy, but it might be the key to unlocking your future. Companies need vision and wisdom, and putting together a dream team of your own may be just what you need to provide strategic direction, access and talent that you couldn’t afford to hire as a permanent part of your team.
Think of an advisory board as your very own dream team without the cost of having them as employees. Although advisory boards are not a board of directors and have no formal legal authority, you shouldn’t put one together unless you plan to use it and listen to the advice offered by your advisors. If you are too stubborn to ever listen to anyone else, then don’t waste your time. But if you are open to other viewpoints, this may be a good way to start off 2014.
Advisory boards can help you with the following: unbiased perspective on key issues from outsiders who have been where you are headed, access to open doors and create new partnerships, greater outside credibility, increased accountability, wisdom in avoiding mistakes, sounding board for evaluating new ideas, specialty expertise and knowledge, crisis management and much more.
The first thing to consider is who you would invite to participate. One major criteria is to look for people who are in or have been in the stage where your business is heading. This will help add to your foresight and ability to avoid major pitfalls. These people may be in other industries. I am talking more about the size and scope of business.
Another key criteria is to look for skills that you need to make strategic decisions. This could include areas such as: finance and banking, human resources, logistics and transportation, sales and marketing, product development, etc. Your goals and key areas for the advisory board to cover are also a major driver for your selection and invitation process.
Normally, an advisory group should be small enough to get stuff done but large enough to have meaningful and varied input during conversations. Three, five or seven max are good sizes for a board. It is important to have an odd number so that votes can be taken.
You want to make sure that you get people who will freely speak their mind and have a constructive opinion. At the same time, you don’t want a mixture of personalities that will be too explosive to actually be effective. Everyone needs to be able to respect each other while being varied enough to effectively hash out the topics to be covered. You are not looking for yes men. Neither do you want hot heads with egos the size of Texas.
Surprisingly, many business experts don’t recommend that you put your lawyer, accountant, financial advisor or other key professional service providers on your official advisory board. These people can brief your advisory board and offer them opinion. But it is better that they remain in their current capacity. You usually want to avoid putting on this board family members or others with emotional interest or ties to the business.
Find advisors who are intrigued by your business and strategy. That will ensure that you get their full attention and passion when they are in your meetings or preparing for them.
When you get ready to invite prospective advisory board members, provide them a short prospectus explaining the business and why you want the board as well as any key areas they may deliberate. You may need to offer some form of compensation, or at the very least cover their expenses involved with participating in your meetings. Compensation can range from a couple hundred to thousands of dollars. It might be based on the term of service or paid for each meeting.
Normally, meeting 3-4 times per year is best. This hits the sweet spot between meeting too much or too little. Advisory board meetings need a specific agenda focused around where you are headed as well as any key concerns of problems. Most companies have advisory boards sign a legal agreement that stipulates what is expected from members and what they will receive in return as well as standard items, such as a non-disclosure clause, indemnity clause shielding advisors from legal challenge due to suggestions of the board, language explaining that the members are not employees of the company, and the right that the company has to publicize its advisory board.
The best place to start looking for advisors is your current rolodex and business contacts. They may be able to make referrals to people that you don’t even know right now. With the Web, you can use LinkedIn, or basic searches to find certain expertise. You want sharp minds that will provide a variety of perspectives as well as personalities that will mesh together to provide positive and forward thinking discussion. You want to seek answers to the key questions that keep you up at night.
There are some variations to the typical advisory board that may work for you if what I have described is not a good fit to your organization. You might meet with potential mentors for one-on-one conversations over a cup of coffee. This may be a good thing to do as you seek to build relationships to create a more formal advisory board.
You might want to create a specific task-centered advisory board that meets only to address a core concern and then disbands. Regardless, the focus – you will want to have the board serve a specific term such as 1-2 years. You can always ask them back in the future if a board member proves to be very valuable. If the person works for somebody else, you need to make sure that they are allowed to serve in this type of role for another company.
A key to remember is if you build it, use it. Assembling a good dream team of advisors may be just the boost you need to overcome your challenges and grow.
