For founders who want to harness the expertise of seasoned professionals without employing them directly, an advisory board can be a highly effective solution.
An advisory board of knowledgeable individuals provides guidance, insights, and network opportunities for you and your team without the fiduciary responsibilities of a formal board of directors. This article gives you the tools for creating and maintaining 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. 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 the expertise you need to get there? Fill these specific gaps with your advisory board picks.
- Diversity in perspectives. Diverse thinking addresses the blind spots we all have, and 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 complementary 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 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 is 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 are working toward and can see the progress over time.
Fostering productive working relationships
Making the most of the advisory board's potential requires nurturing the relationship between the board and company leadership.
- Open communication. Keep a regular and open line of communication. Keep advisors updated with business operations and challenges to get the most pertinent advice.
- Structured 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. Advisory board roles are often not salaried positions, but it is appropriate to offer some form of compensation. Options include equity, expense reimbursement, or a modest stipend.
- Mutual respect and value. Show appreciation for your advisory board's input and recognise its influence on your company's trajectory. Board members, in turn, must respect the operational authority of the company leadership.
Key takeaways
- 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 maximise board contributions and maintain a viable working relationship.
An effective advisory board can be a catalyst that propels a business forward. The establishment of one is an investment in your company's future, so lay the groundwork for a successful partnership.
