When you’re leading a growth company you’re faced with daily decisions – some inconsequential and some weighty.
The latter, of course, is why you often hear leaders say, "It's lonely at the top."
To ensure smart growth decisions are made, many business leaders will form an advisory board to supplement the management team and provide valuable insights, connections and industry knowledge.
Doing this not only helps with that "lonely at the top" feeling but also results in smarter growth.
But before making the decision to form an advisory board, I encourage my corporate clients to ask themselves these 3 questions before making the leap, and I challenge you to do the same:
Forming an advisory board is a way of inviting industry leaders with expertise in key areas to support your company's growth. An advisory board can act as a sounding board for decision making, add credibility to the company and provide personal introductions to funders, clients and talent. And, of course, having that subject matter expertise within your company's reach but not on its payroll ensures crucial business functions are being addressed before your business can afford more high-level hires.
In this way, advisory boards fill both knowledge and experience gaps in your team as your company is growing. Not to mention the fact that all business decisions – whether a company is startup or growth stage – are better when informed by different perspectives.
So, if you're not open to receiving, considering and acting on the guidance of others, an advisory board won't be very valuable at this point in time.
Once you’ve decided you're ready to create an advisory board, the next step is to determine who to ask to join it. A good first step is to add advisors who have legal, accounting, marketing and financial expertise as these functions are essential and also require specialized and costly knowledge.
Additionally, look at your own strengths and gaps and let those inform which expertise to add first.
I recommend that my clients seek out advisors with very different backgrounds from their own. I also caution against adding a “big name” just for the sake of higher visibility or publicity.
You need advisory board members who actually have the bandwidth to serve on your board and can commit for a year or two. During the selection process, make sure to ask each advisor candidate if they can commit their time, network and resources for 12 to 24 months.
Every company uses their advisory board differently. You need to structure and leverage this group to support your company's unique needs and the way you want your advisors to work together.
For example, you don’t want your advisory board members to just say "yes" to all your ideas. They need to add value and be willing to roll up their sleeves and help with the heavy lifting.
From the beginning, clearly map out your expectations of the board. Distribute your business plan so the board is clear on your goals and where they can add value. Also, make sure to prepare for board meetings and use all advisors' time wisely.
Finally, stay in touch with your advisory board members in between meetings. This will help you build a strong relationship with your advisors, as well as allow you to use in-person meeting time to focus on strategic and/or new topics, rather than status updates.
