The single best growth initiatives a business owner or CEO can make at some phase of their journey is to build an advisory board: a carefully selected group of advisors that believe in your leadership, your mission, and your contributions. Advisors who are committed to seeing you and your efforts succeed.
Most business owners who compile, or attempt to compile a board, can fail in the desired results because they simply have not selected the right advisors to help them grow and ultimately be successful.
If you are considering implementing an advisory board, follow these first steps to attract and recruit your best advisors:
1: Complete your Vision, Mission, Values, and Strategic Plan first
To create a comprehensive advisory board framework, you must have your foundational pillars built out first. What does your business stand for and where is your business going? You must be able to articulate this clearly to any prospective board member. You must also be able to convey your target customer market and the competitive landscape - to someone who is not as likely familiar with your particular line of business as you are but that offer significant depth in other areas of expertise and business execution. This IS NOT the work of the board to create this - this is your job and an absolute necessity for recruiting. Of course they will have input into refining these documents, but the tighter these documents are the more they know exactly where your businesses is headed and how they might be able to help achieve it.
2: Select Advisors That Are Ahead of You
Choose advisors that are already accomplished in their efforts and have demonstrated of leadership and success, preferably at least some who may have some additional time to allocate to your efforts (such as recently selling their business, or have retired early). Select advisors that have achieved what you are also trying to achieve, so that you can learn from their success (and perhaps more importantly their mistakes). It is of little value to recruit others that are exactly where you are. In building out a board, consider their connections and who they think may be best suited for this opportunity and who together you can recruit.
3: Your Advisors Should Fit Your Needs
Are you expecting your advisors to only work with you, or your top leadership? Do you want them mentoring you, or are they working with others on your team like your new CFO or Marketing/Sales VP? Are you expecting them to be available for meetings during the day, or to only meetup quarterly or as needed. Are you needing your advisors to make key introductions to investors, lenders, or potential customers? Remember the more influential and connected the advisor, the less time they may have to participate in the details, but their connections and wisdom can be extremely powerful and helping you leap to the right connection.
4: Start Small and be Extremely Open to Critical Advise
Start with no more than 3 advisors unless you've created or participated regularly in such boards in the past. This size may allow them to have discussions on their own separately about you - which you should welcome as well. Expect and be very open to criticism (one person's criticism is another person's excellent advice) - as you yourself assembled them specifically to show you the weaknesses in your business (often it's you) and what you can do to improve. Do not be surprised and do not be offended if you learn of such an advisor being critical - and solicit their feelings regularly instead of trying to avoid it. Formulating and calling out stumbling blocks in your business is typical of a new board and shows genuine engagement, knowledge, and honesty you want.
5: Set Expectations: Execute a One-Year Agreement
Whoa! You think you're not there yet? Well that's all good but if you're serious about growing your business this is highly advisable. An advisory board should be an evolving entity that will likely change as your business and aspirations grow. You want the option of re-evaluating each advisor at the end of each term (without offending the individual) to evaluate if they are motivated and aligned with your goals for the year ahead, and if they have met your expectations. This also proactively gets them thinking about a replacement for themselves, should they become too busy or they see the opportunity to add a needed advisor, as well as a way for them to gracefully exit should they so decide it's time.
Tip: One such way to recruit talented board members is to institute a restricted stock agreement if you are giving equity to those advisors, such that you have the option to buy back the stock at the termination of their service or at a specific point in the future. This gives even greater motivation for your board advisors in helping to increase profitability or in raising funds, such that they can receive a financial benefit but without you or the company not having to ultimately give up the equity or control. It's certainly nice having optionality - and shows a certain amount of seriousness on what you are looking and expecting from them and how you value their time.
Summary: Selecting the right advisors to help your decision making is equally as important, if not more so, as selecting the right employees. The wrong advisors will be a waste of energy, time and resources. Good advisors, however, can and should energize you, immediately free up more of your time, and release that mental weight you've been carrying or inevitably will carry. Building such advisory boards more often than not pays huge dividends well into the future both for you, for your business, and for each advisor. It is a critical investment in not only your business, but in you.
