Advisory Boards: Are you getting the right advice?

Below is an article that Debra Chantry, Our Principal & Business Coach, wrote the following article for The Icehouse…   Debra Chantry, Business Coach and Mentor at The Icehouse, sheds light on the importance of an Advisory Board – How an Advisory Board can impact your business, how your business can tell whether your Advisory Board is cutting the mustard, and what can happen businesses who choose to fly solo.     An Advisory Board is like having a Business Coach or Mentor, on steroids. Rather than one experienced person to help you with accountability and acting as a sounding board, you can have two or three that not only provide you with big picture thinking but the diversity that a single coach or mentor cannot offer.                                                                                                                              The whole purpose of an Advisory Board is to drive a business forward – but when should a business start a Board? A formal Board of Directors usually comes once there are multiple shareholders in a company. Those who make up the Board of Directors are more often than not appointed by the shareholders to legally manage, direct and supervise the company.   However, there is a middle step for startups & SME businesses and that’s an Advisory Board. An Advisory Board is more often than not set up by the Owner/ Manager of the business, with these Boards existing to provide defined advice and information in an informal and flexible manner. There may be a number of reasons why your business or startup may be seeking out governance in the form of an Advisory Board:  
  • Others can help your success by providing valuable business insight and oversight.
  • A specific area of interest, e.g. entry into new market requires specialist advice.
  • You are looking for early stage market validation.
  • The flexibility of engagement appeals to you.
  • You need help with succession planning and/or to become investment ready.
  • You want your business to become more professional.
  So therefore, if you meet any of the above criteria, and you are willing to share information then no matter what your size or your stage of growth, you are ready for an Advisory Board.   With the purpose of an Advisory Board being to drive growth or the business itself forward, it’s important to be very selective when choosing your members. They will often not only have experience and knowledge but also the networks and connections that can help your business to fast track. To ensure you get the right advice, you want members that encourage open and robust discussion of ideas – hence why family and friends are a strict ‘no-go’ zone.   The key question is: will my prospective board member add value to my company?   To be able to answer this question, the power of hindsight is essential. Knowing that a strong Advisory Board should have a diverse set of members that either have experience, knowledge, or networks and connections that can move the business forward is one of the first steps. Diversity means bringing the full breadth of relevant skills and experience from across all of the fronts the business has to operate in.    A strong Advisory Board will also be adding value to your business. They will be reading the reports in advance, contributing positively to the discussions within the meeting, challenging assumptions, offering knowledge and their experiences, and following up with the action points following the meetings. If they’re not doing this, then it’s time to fire them and move on. Fortunately there are few legal headaches around an Advisory Board – they’re designed to be flexible so that you can change them as the business needs change. The sooner you can exit and replace poorly performing members, the better.   An Advisory Board may be published/associated with the business i.e.: they feature on the company website or in materials such as business plans for fundraising. Therefore, it’s important that you not only background check the Advisory Board Member before they come on board but you also set the ground rules around what is expected and whether or not they can engage with the media on behalf of the company. If the Advisory Board member has anything in their past or has a tendency to be ‘loose lipped’ with the media, then what they have done or what they say can have an impact, both positive and negative on the business. Just like employees, they are essentially an extension of your company brand. Without giving specific examples, you can imagine what an Advisory Board member, associated with your company, creating bad press can do for your business reputation!   Although it is not crucial for a business to have an Advisory Board, it certainly helps to fast track your business while keeping you and your team focused. Much like having your own personal business coach, Advisory Boards can really help with acceleration, avoiding common pitfalls in your market, opening doors to influential people, and establishing the bigger picture.   When you’re trying to really grow your business, flying solo can feel very lonely as well as dangerous. You want advisors that have experience in an industry that is relevant to your business and who have operated in a larger and more complex organisation. You often can’t see the wood from the trees or you are blinkered in your thinking because you are too close to the business. Sometimes this can lead to small issues, other times they can lead to you wasting valuable time, money and resources.   Looking to someone to walk with you, inspire you, champion you and celebrate success with you can make the journey seem a lot less lonely. If an advisor is not the wings to help you fly, then its deadweight.