With the current economic turbulence, it is hard to grow your business... perhaps it is time to try something different?
6 tips to establish an effective Advisory board
According to a McKinsey report, the number one driver for growth in mid-sized businesses is getting advisory and tactical support. But how many do? Not many. “Less than 6% of small to medium businesses have an advisory board and the ones that do are seeing 3X revenues and 2X productivity.. In fact, 86% of leaders believe that having an advisory board has had a significant impact on the success of their business. Areas of impact most often cited are company vision, innovation, risk management and profitability." BDC Report
So, the burning question is why don't more businesses use them?
As a CEO or founder, it's easy to get stuck in the weeds, we all do it; dealing with the day-to-day challenges of running a fast-growing business; optimising your deal flow, managing cash flow, prioritising different R&D developments or anticipating the resources required for the next 12-18 months. How often do you take a step back, look at the bigger picture and look really wide?
Now, you may suggest that’s what your executive board meetings are for; a fresh, strategic perspective. However, most boards spend time covering pressing legal and governance issues, not to mention the political dynamic with different connections, allegiances and history, hence whether you decide to reveal your vulnerabilities or not.
It is a structural issue; many boards are a collection of people with a vested interest. If you ask most people who sit on boards they will tell you it is not in their interest to shake the tree. This only happens when things go really wrong and often it is then too late. Whereas, an independent advisory board can provide a different kind of support to the management team. With less at stake and no inherent bias, they should provide robust, valuable advice which will save you time and money.
But how do you create a well-functioning, independent advisory board that will grow your business? Here are my 6 tips: 1 - Independent members You need to source people from outside your network with diverse backgrounds, skill sets and thinking styles. This is the only way you will get independent and transformational insight.
2- Less, but different people Board meetings should be challenge-focused to ensure clear, tangible outcomes. You select fewer, but highly relevant members and you rotate depending on what skills are required for each topic. Less people make it easier to have productive discussions.
3 - Externalise the chair It is a game-changer to use an external person to chair the meetings because they have no agenda to skew the discussion and their core function is to facilitate collaboration between all members.
4 - Formal structure Follow a tight structure to enable each party time to contribute and reflect, ideally in accordance with their thinking/personality profile. This maximises contributions.
5 - Results-focused The facilitator doesn’t follow up with minutes, but an action plan. So, whether it is the board members or the executive team, everyone knows and is accountable for next steps.
6 - Executive team in listening, not defence mode This is fundamental. You can input everything you want to discuss in the briefing document ahead of the meeting, but in the session, you need to be silent. OK, you can answer questions, but the function of an advisory board is to listen to what experts from outside your business and industry can see which you can’t. This seems like a lot of work, but as you can see from the growth figures at the beginning, get it right and it will pay for itself 3 fold.
It is the combination of these elements that creates a ‘safe’, collaborative culture where each person’s different contribution is valued so members will be motivated to share their insight. This is the way you maximise the diversity of thought to drive innovation and growth. How many times have we sat on boards where the highly experienced expert contributes very little? Because if you are an introverted, deep processor with a cautious outlook you are less likely to share a hunch with a room full of strangers.
Creating an advisory board to best support and grow your business doesn’t have to be a lot of time and energy. Having been on advisory boards and boards ourselves we decided to use our experience to set up The Vision. We deliver advisory boards as a service, fuelled by independent diverse thinking experts to unlock growth and transformation.
We rotate our 50 pioneering experts from all over the world to address your specific challenges and because we run our Advisory boards online, we select the brightest not the closest brains. We manage the whole process; briefing packs. Board facilitation and high-level action plans. But when done right, the results are exceptional; 40 % month on month growth in sales, product launched 3 times faster, 67% more customers etc…. feel free to look at our case studies. Having an advisory board can be a game-changer for your business; providing you with invaluable feedback, expertise, and connections that can help you make better decisions and achieve sustainable growth. If you don't have an advisory board yet, can you afford not to? Have you already formed one for your business? Share your thoughts and experiences in the comments below! To find out how The Vision can accelerate growth in your business get in contact.
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