Creating A Business Advisory Board
(By Gil Gerretsen) As a company grows and becomes more successful, a business advisory board can become a very helpful resource. However, there’s a good way to build one and a poor way to build one.
But first, it important to understand the primary value of a business advisory board because there’s one thing that trips up far too many founders and professionals. It’s pride. Starting to think you are smarter than other people and that you have all the right answers. Such a self-righteous mindset leads to arrogance. Arrogance leads to missed opportunities and neglecting potential threats.
How To Think Differently About Your Business And Advisory Board
Wise entrepreneurs do TWO THINGS to combat the above mentioned.
First, they build a personal mindset that they can learn something from almost everyone. Their employees, their vendors, their peers, their investors, their network, their advisors.
Second, they find a way to stay out of the ivory tower. They build an informal business advisory board as a small team of people they trust well enough to let them “whack the side of their head” and bring them back to reality when necessary.
However, don’t build a business advisory board that meets together as a group because that’s too inefficient - for you and for them. It is better to build an advisory board with people you can meet with 1-1 on a regular basis to discuss your business from the viewpoint of their particular area of expertise.
What About Structure For Your Business Advisory Board?
I suggest five types of people for your advisory board:
An industry expert who studies your “Mechanics” — the business delivery processes (how you do what you do).
A financial expert who looks at your “Money” — are you on top of it and managing it well?
A personnel expert who looks at your “Manpower” — your HR processes and compliance matters.
A business development expert who looks at your “Marketing and Sales” — are you positioned and executing well?
A leadership expert who looks at your “Management” — do your processes tell you what you need to know?
Your lawyer(s) and CPA generally DON’T become part of your business advisory board matrix unless they just happen to have a special skill or insight for your situation. They are vendors and that’s a different type of relationship.
What About Compensation For Your Business Advisory Board?
To motivate your business advisory board to continue paying attention and be willing to meet with you 1-1 each month, they should be paid for an hour or two of their time each month. Expecting great advice for free is unwise and unfair.
Likewise, people who do it for free are also unwise or perhaps not the right people for the role … unless they are just at a point in life where they can be truly altruistic. No matter what, make sure you keep rewarding them in some meaningful way.It’s the right thing to do.
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