For many small business owners, entrepreneurs, startups looking to harness the expertise of seasoned professionals without having to employ them directly, establishing an advisory board can be a highly effective solution.
An advisory board, composed of knowledgeable individuals, provides invaluable guidance, insights, and network opportunities for you and your team without the fiduciary
responsibilities of a formal Board of Directors. This article aims to equip you with the tools and knowledge necessary for creating and preserving a flourishing advisory board.
Selecting Advisory Board Members
The foundation of any robust advisory board lies in its composition. Choosing the right members is essential; they will act as your sounding board, thinking partners and sometimes, your sanity-check. Here's how to form a valuable team:
Identify the Skills Gap: Look at your current situation and envision where you want your business to be. Where are you light on expertise that you need to get you there? Aim to fill these specific gaps with your advisory board picks.
Diversity in Perspectives: Diverse thinking addressed the blind spots we all have, and thus leads to greater innovation. Include members from different industries, backgrounds, and skill sets who can challenge and enrich the conversation. Someone who thinks the same as you on everything will not add much value.
Shared Vision, Unique Insight: Board members should believe in your core mission and bring complimentary viewpoints and knowledge that align with your business objectives.
Credibility and Network: Consider the reputation and breadth of the professional network of potential members. The broader their reach, the more doors they can potentially open for you.
Setting Objectives
An advisory board without clear objectives can quickly become a roundtable of opinions without direction. To avoid this:
Align on Key Objectives: Set specific goals for what you want the advisory board to help you achieve. Whether it's entering a new market or refining your product development process, these objectives will steer your meetings.
Be Realistic and Specific: Set achievable and quantifiable goals that can be assessed periodically. This ensures everyone understands what they're working toward and can see the progress over time.
Fostering Productive Working Relationships
Maintaining the momentum and making the most out of the advisory board's potential requires nurturing the relationship between the board and company leadership.
Open Communication: Ensure there is a regular and open line of communication. Keep advisors updated with business operations and challenges to get the most pertinent advice.
Structure Feedback Loops: Regular meetings and transparent feedback mechanisms are vital. They help maintain focus and inform advisors on the impact of their guidance.
Compensate Accordingly: While advisory board roles are often not salaried positions, it is appropriate to offer some form of compensation. You can be creative here based on your commercial situation, and options include equity, expense reimbursement, or a modest stipend.
Mutual Respect and Value: Show appreciation for your advisory board's input and recognize its influence on your company's trajectory. Similarly, board members must respect the operational authority of the company leadership.
Conclusion
An effective advisory board can be a catalyst that propels a business forward. By taking the time to select the right members, setting clear objectives, and fostering a culture of robust dialogue and mutual benefit, you can build a team that not only guides but also grows with your business. Remember that forming an advisory board is not just about seeking short term advice but creating a structure that harnesses collective expertise for the big picture wins for your business.
Key Takeaways for Business Owners:
Carefully choose advisory board members who complement and enhance your existing team.
Clearly define the goals of the advisory board to focus its efforts and benchmark successes.
Cultivate a culture of transparency and respect to maximize board contributions and maintain a viable working relationship.
Remember, the establishment of an advisory board is an investment in your company's future—make sure you're laying the groundwork for a successful partnership.