Top Three Tips to Get the Most from Your Advisory Board
As we review best-practices at CEI, the creation and management of an advisory board that provides a well-rounded sounding board for our clients rises toward the top.
We are not talking about the formal Board of Directors who are responsible for the governance of the company and is typically composed of the founders and investors in the company. As the name implies, an advisory board is created to advise the founders in subject matter areas where they may be lacking knowledge and skills. In the article linked to this message we talked with Jean Ekobo, CEO of BioNovelus, an ecofriendly agriculture fungicide. We explore how he uses his board of advisors to guide his strategic vision, to fill critical knowledge gaps, and to leverage a network of connections.
1. Be Purposeful in Selecting Advisors – Know what you don’t know.
If there is a key to creating an impactful board of advisors it boils down to your ability to know what it is that you don’t know. Once you can honestly identify the knowledge and skills gaps required to move your company from Point A to Point B then you can get focused on identifying individuals with those skills and recruiting them to serve as an advisor. That in a nutshell is the primary purpose of the advisory board … fill knowledge gaps with people in the know.
For BioNovelus who is launching a bio-friendly fungicide to control the coffee rust epidemic in Central America this meant identifying individuals with knowledge and experience in export regulations, designing protocols for the field testing of crops, and bio-chemical engineering.
The knowledge gap to be filled by an advisory board can extend to needing to know the key players in an industry or market. In this situation you are looking for advisors who are well connected within the industry and are willing to leverage their network of contacts to your advantage.
So be very purposeful in identifying the subject matter expertise and industry connections that you need to be successful. You are not looking to fill the board with friends or ‘yes’ people who share your perspective and may give you the advice they think you want to hear. Rather build a diverse set of advisors who are willing to challenge your assumptions and who can bring new information and perspectives to the table. And remember that the profile of your advisory board will change over time to match your company’s current strategic challenges. So appointing advisors for a defined period of time allows you to evolve make-up of your advisors to reflect your then current needs.
2. Create an Advisory Board Plan
There is a sense of obligation to someone helping you to make sure that they understand what their role should be and what is expected of them. It is extremely helpful to have a documented plan for making sure prospects are a good fit as well as getting new board members up-to-speed. The plan should include the following:
What are the company’s “must haves” for this person?
What are the deal breakers?
How does the company remove an Advisory Board member?
What do you want the board to accomplish?
What are the specific areas you need their help with?
Are they - Advisory? Fund Raising? Specific Expertise? Connections?
How do you want them to behave? Hands on? Advise only?
System to get new Board Member up to speed on the company
Is your company a startup, in growth phase, or at maturity?
What is the vision and values of the company? (Is the person the right fit with our vision and values?)
Current status of your company - strategy to execution
3. For best results keep Advisors engaged
For most start-up companies a position on the Advisory Board is done on a voluntary basis and is not a paid engagement. So it is important to realize that advisors are motivated primarily by their desire to be of help and to be connected to an exciting development in their industry. Many are successful executives who view advising as a way to ‘give back’ to the industry or eco-system that earlier had served them. Jean Ekobo shared his advice on how to be mindful of an advisors’ needs and how to express appreciation for their contributions, “the key is to use their time efficiently.”
This efficiency starts with the design of the advisory board meetings. There should be a formal agenda with timelines that are observed and allow for an equal balance between presenting to the advisors and creating the opportunities for them to question, explore options, and provide their input. This agenda and all supporting materials should be sent well in advance of the meeting date so that participants can be prepared to contribute. It is also important to remember that advisors may be fitting this board meeting into an already full day, so providing food and beverages at the meeting allows them to be more productive with their time. Jean is an Executive Chef so you can be assured his advisors are well fed.
A quarterly meeting schedule seems to be the most common for advisory boards. So it is important to keep advisors in-the-loop between meetings so that they can track the progress of the company and so that only a minimal amount of time is needed at each meeting for general updates. Jean recommends that personal emails are sent from the CEO on a regular basis to share the current company news, report any progress toward milestones, and to acknowledge his appreciation for the ongoing advisor support. This ongoing personal touch is often the difference in building a truly effective advisory board that provides you the priceless input that puts your company on the right path.
A strong Advisory Boards can be a key in moving forward at a quicker pace and being successful. One thing to remember is as your company grows, you may need change your Advisory Board. Startup and growth phase are very different. Therefore, your members will need to change as the company evolves. Have this discussion with your board members at the start. This will help if the time comes that you need a different person.
Advisory Boards can make all the difference in the speed of growth, having expertise available to help avoid mistakes, and an objective viewpoint that "keeps it real."
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