Tag Archive for "Board of Advisors"
As an advisory board consultant and facilitator I see companies and CEOs all the time who would benefit from having an advisory board. Often the CEO is hesitant because the financial records aren’t perfect, there is no sales or marketing plan, the marketing campaign is faltering or some other reason. About the only acceptable reasons not to start are either the CEO can’t accept constructive criticism or the company simply isn’t ready.
So how do you know when it’s time? Consider the twelve questions:
- Is there is insufficient depth to the senior management team?
- Do you meet with your attorney and accountant only on an as needed basis but need broader advice?
- Do you often ask friends and family for advice?
- Does the vision for the company call for rapid growth but you don’t have a strategy developed or a tactical plan?
- Has the company outgrown the existing infrastructure and you aren’t sure where and how to proceed?
- Does the company’s growth depend on expanding the roles of various functional areas but the cash flow won’t support hiring full-time staff?
- Do you belong to a CEO forum group but need the focus to be more on your company?
- Are you thinking of bringing family into the business and don’t want to upset loyal employees?
- Do you need to develop an exit strategy and/or succession plan?
- Do the senior managers need guidance and assistance but the company can’t afford consulting fees?
- Are you thinking of forming a legal board of directors?
- Do you sit on an advisory board and see how much value it brings to that company and the management team?
If you answer yes to 9 or more, then you are ready to start forming an advisory board. 8 or less yes answers and you are either still in the considering stage or it’s not time yet.
Want to know more about establishing an advisory board? Check out the Advisory Board Kit.
I won’t kid you, establishing an advisory board takes time and effort if you want to do it right. I use a multi-step process. If you haven’t recently completed any business or strategic planning I would recommend you plan to complete all the steps.
How long it really takes is completely up to you. Exhibit 19 in the Advisory Board Kit is a chart detailing the steps and the time line for completing each. I summarize it here:
Month One:
- Develop company vision
- Complete SWOT* analysis
- Identify skills & talents needed
- Develop the advisor profile
Month Two:
- Set advisor compensation
- Create the statement of roles & responsibilities
- Develop the advisor pitch
- Identify information to give prospective advisors
- Identify & prequalify prospective advisors
- Interview prospective advisors
- Check references
Months Three & Four:
- Continue to interview prospective advisors
- Continue to check references
- Pitch the prospective advisors
- Invite the prospective advisors to serve
- Orient the advisors
- Plan the meeting
- Run the meeting
In a perfect world expect the process to take 90 to 120 days. At the end of that time you will have a board comprised of people you really want to take advice from and be accountable to.
Want to learn more? Then check out the Advisory Board Kit: A Comprehensive Guide to Establishing an Advisory Board. The book and related programs are now available.
*Strengths, Weaknesses, Opportunities & Threats
How well you prepare to select your advisors will make or break your advisory board. It’s not a simple matter of selecting friends and colleagues, at least not if you want to have an effective advisory board and not waste time or money. It requires thought, honesty, analysis, and planning.
I have observed that many advisory boards get “slapped” together with insufficient thought and planning. The end result is people don’t show-up, money gets wasted and the company never starts its ascent toward greatness rather it wallows in mediocrity.
Answering the following questions will start you on your way to selecting advisors successfully.
- What does your company stand for?
- Why does your company exist?
- What is your company good at and known for?
- What do the markets you serve want and need?
What these four questions get at is the vision for your business. The people you ask to be your advisors will be very interested in this information.
- When was the last time you analyzed your business from the perspective of its strengths and weaknesses, opportunities and threats?
In the course of completing whats is known as a SWOT analysis, you will determine where the gaps are in skills and talent. This exercise requires that you and your senior management team, to the extent you have one, be honest with yourselves and each other.
Once you can answer these questions you will have the information you need to identify what type of advisors you need.
Want help with this and other exercises to build your advisory board? Consider the Advisory Board Kit, A Comprehensive Guide to Establishing an Advisory Board. Learn more by clicking here.
