In the previous primer on advisory boards, our Founder Orlando looked into the pros and cons of assembling one and the rudimentary principles behind them. Now he shall digs a little deeper into the process of getting the most out of them.
I should first make the point that Advisory boards are not the preserve of start-ups or scale-ups. In larger, more established businesses, the ability to have not just a formal board but a hybrid advisory into operational board has many uses too. For the purpose of this piece, however, we are looking at it from the perspective of a ‘younger’ business.
In either instance, once you’ve assembled the board you need to put it to work. Obvious, perhaps, but it’s very easy to be silent about what you expect from the board, especially if you’re dealing with big names or people of significant standing. They have agreed to help you primarily because they like you and how you are approaching your business and also because they see a commercial return at some point in the future. You should feel completely comfortable asking them for help or advice, whether you are paying them in cash, hard equity, options or not at all.
Perhaps the best way of approaching this is to understand what you can expect from a good advisor and then to go ask it from them, using the people management skills you’ve developed.
Introductions by your Advisory Board
Effective advisors will be able to make key introductions to help your growth. They have developed significant contacts books over the years and it is for you to take advantage of these networks. That means presenting you to potential investors, lawyers, business partners, employees and so on. This opening up of new and extensive networks can be a huge money and time saver, but it does require you to keep the advisors well primed on the progress of the business so they can point you to the right people.
Similarly, good advisors will be able to sniff out good fund-raising opportunities, particularly if there is a financial incentive (such as equity options). Again, broad contacts books can offer private equity contacts, capital-raising expertise or high net-worth individuals.
Finger on the pulse
Keeping you abreast of industry developments is another key role of the effective advisor, not only in your immediate industry but also in others where there may be significant opportunities. You also acquire another eye to monitor the competition. This requires you to again keep the advisors sighted on developments affecting your strategy so they know where to look when you are too busy.
When it comes to hiring processes, use your advisory board members in the brief creation, briefing and selection process for roles that they have technical expertise in. That they are not part of the day-to-day company culture makes their input that much more objective and critical. It will provide an informed sounding board, even if you choose to ignore their advice.
Expect honesty and don’t be affronted by it. Keep the advisory board informed on all new initiatives so they can challenge. If your advisors aren’t offering criticism of certain strategies or elements of them, they either think you are a genius or have become disengaged. You need to make sure which it is and ensure you are getting the right advice.
Of course, there is no “one size fits all” strategy and every advisory board member will prefer to operate in his or her own way, but you can expect them to tick all of the boxes above. Remember that you are, in effect, collaborating with them for three main reasons: to prevent you from making avoidable mistakes; to provide access and connections; to help you grow your business. It may be the case that one advisor can do all these things by just being a significant somebody and your relationship may just be in name only, whereas others will be much more hands-on.
If you think an advisory board could be the catalyst for your company to grow to the next level, then we’d be delighted to discuss how to find the right people for you. To enquire about how ORESA can help you find top level personnel contact us today.