Co-authored with Margaret Wilson of Tandem Partners
When you’re leading a growth company, you’re faced with daily decisions, some inconsequential and some weighty. You’re so focused on the next project, the next sale or the next new hire that you may not see the larger picture of where your business is going and how to manage or grow it. Add to that, economic uncertainty, changing markets and increasing competition, and even experienced leaders can find themselves asking: Am I making the right decisions for the future of my business?
An advisory board provides experienced, objective perspectives without governance responsibilities. The right group of advisors can challenge your thinking, expand your network and help you avoid costly mistakes.
But before making the decision to form an advisory board, there are three important questions leaders should ask.
Gaining clarity around what you need help with is central to creating an advisory board designed for the challenges and questions you face as a leader. Invest time thinking carefully about the state of your business and obstacles to moving forward. The clearer you are about the challenges you’re facing, the easier it will be to recruit the right advisors. Here are a few guiding questions to help with this discovery:
Next, ask if your business is actually ready to use an advisory board. Fundamentally, an advisory board is there to help your growing business make the transition from being a founder-managed, entrepreneurial venture to having professionalized management. During this transition period, many business owners may need more than just informal advice from peers to take the company to the next level.
Thus, an advisory board serves an important purpose during this period of transition. However, it can be hard to shift from making all the calls and decisions and being a bit of a lone ranger to being receptive to advice and feedback from an advisory board. So, if you're not open to receiving, considering and acting on the guidance of others, an advisory board won't be very valuable yet.
The most effective advisory boards have a clear purpose, vetted members and a structured approach to meetings. By setting up an advisory board that meets regularly, with agendas and minutes, business owners can be assured of prompt attention to key issues, coordinated action and implementation of decisions. In turn, business owners and leaders will become comfortable with the idea of outside review of the business, paving the way for a true board of directors in the future.
The right advisory board can accelerate growth, strengthen decision making, and help leaders navigate complexity with greater confidence. Understanding where you need help, creating an environment conducive to receiving feedback and advice, and developing structure will all help you get the most benefit. If you're considering an advisory board, start by clarifying the challenge you're trying to solve. The answers to that question will inform everything that follows.
