An advisory board can have a greater impact on your company than you might imagine.
In fact, a poor advisory board can waste the CEO’s precious time while a great advisory board can help her achieve business goals significantly faster.
But how do you ensure you have a great advisory board and that you’re receiving the most value you can from it?
Here are a few “musts” that can make the difference between an average advisory board (or one that actually hurts your company) and one that supports and forwards your company’s success:
Before You Talk to Anyone, Examine Your Goals
The first step in getting more value from your advisory board is analyzing why your company needs an advisory board in the first place.
This means that before you even begin to think about “who” you need to think about “what.” Specifically, what are your company’s plans, opportunities and challenges:
Are you launching in a new market?
Concerned about getting the most from your digital marketing strategies?
Seeking additional funding for growth?
Every goal will require a different type of expertise and looking closely at what you want your company to accomplish will guide you in building the right advisory board.
The most talented individuals also tend to be the most cautious with their time. So the more clearly you can articulate what you are looking for to a potential candidate, the more chance you’ll have of securing that person’s support.
Search for Complementary Not Copycat Skill Sets
Once you’ve established your goals for your advisory board, take a look at your own competencies and that of your key employees to identify important skill gaps that exist and that could prevent your company from achieving its goals if not filled. This will create an even clearer picture of the specific expertise you’re looking for in your advisory board.
But just as you want your advisory board, as a whole, to bring new skills to your company, you also want each member’s skill set to complement rather than copy the skill sets of other members. Above all, you need to build a diverse advisory board in which each person brings unique perspectives and experience to the table in support of your company’s growth.
Prioritize Good Relationships
Rocky relationships present all types of obstacles and challenges that hinder forward motion, so make certain each person is a good match relationship-wise from the beginning.
This is especially important because what you need most is board members who are open and forthright with you – and the quality of the relationship is a significant factor in determining whether or not they will be.
Remember, it’s far easier to continue improving a good relationship, than to first have to reverse a bad one.
And Speaking of Being Open and Forthright
Getting more value from your advisory board requires letting them know what’s happening so they can give you real guidance.
After all, having an advisory board provides an invaluable opportunity to grow yourself as a leader and if you only share how great everything is, you’ll be denying yourself the chance to learn from your board members’ missteps.
So, let your board in and let them guide you – what you’ll get from being mentored by the right group of people is simply immeasurable.
Don’t Say Yes to “Free” Advice
There are many individuals who will join an advisory board without being compensated simply because they like the CEO and want to support him or her. While this is a kind gesture, you’ll get more value from your advisory board if you set up some type of compensation.
Requiring that your advisory board be compensated shows you truly value their commitment and holds both you and your board members accountable for ensuring the board does indeed deliver value.
However, advisory board compensation doesn’t have to be a large expense. A small monthly fee or a combination of equity plus a small retainer will often suffice.
Create the Structure for Success
As a CEO who wants to receive a return on the investment they make in an advisory board, it’s up to you to set a structure that facilitates that ROI. This involves having an agenda for every meeting that covers your current needs and includes specific asks of board members.
It also helps greatly to stay in touch with board members between meetings. Take notes during meetings and track how everything agreed to is progressing during your in-between points of contact.
Additionally, sharing financials and other reports with your board members in between meetings will help them feel more connected to you and your company. Doing this will help your board members be more prepared to help you during each meeting because they will have had the time to think about the best solutions and courses of action in advance.
Finally, your preparation is proof that you respect your advisory board member’s time and will only help to deepen everyone’s commitment to your company’s success.
Carol Coughlin is an accomplished C-suite executive with a proven track record of helping high-growth companies increase profit, overcome obstacles and implement change. She is known for her skills in financial strategy, turnaround, scaling for growth, risk assessment, M&A, managing change and cultivating motivated teams in fast-growth environments. Carol is also a highly experienced and collaborative public and private board member whose roles include Chairwoman, Lead Independent Director and Audit Committee Chair. She regularly speaks on board leadership and governance topics and is a Board Leadership Fellow with the National Association of Corporate Directors.