An Advisory Board – getting extra expertise into your Business, at minimal cost.
Most businesses have strong skills in their area of technical expertise, in this case production.
However, they sometimes lack skills and experience in the wider area of business development, governance, accountability and business management.
When looking to grow your business, sometimes this lack of business acumen or business management skill can be exposed as an area of significant need. And particularly when trying to attract finance to carry out business development plans, either from the bank or a external investor, a lack of skills or order around business management can greatly increase the perceived risk of your business, making it to more difficult to access growth capital.
So, what action can we take?
A good place to start is to create an Advisory Board.
An Advisory Board is usually comprised of:
- The internal senior management team of the business (in some cases this may just be a husband and wife team).
- A chairperson, preferably external to the business, who is present consistently at every meeting, to ensure they are completely familiar with your business.
- A group of specialist advisers, that may rotate over time, depending on the business needs (such as accountant, solicitor, marketing specialist and more). These advisers will come with a range of expertise, usually to complement and expand on skills already within the business.
An Advisory Board usually involves routine, structured meetings of the management team and these Specialist Advisers. At the Advisory Board meetings, specific agenda items will generally be included for each of the major functions or divisions of the business. This will ensure that all areas are regularly reviewed in a structured and organised manner – and are given regular and adequate focus.
Here are 3 top considerations around creating an Advisory Board:
1. A Clear Brief.
In other words, what do you want to achieve? What direction do you want to take? What areas of skill are required to support you in the change and business development process?
The old saying ‘Clarity Leads to Power’ is the most critical one to implement first. It’s important to have a sense of general direction – even if the specifics are unclear. After all, that’s potentially what the Advisory Board is all about – working through with you to gain greater clarity over time.
This means it’s critical to take time to commit your ideas to paper – to create the necessary briefing documents – to give everyone involved a sense of common purpose. This is the first level of clarity.
2. A skilled Chairperson – and a CEO – both prepared to support each other in the change process.
Strong alignment between both parties will be critical – although robust discussion and potential disagreement – are part and parcel of this change process.
Specialist Advisory Board Members – even a small number – with varied skills aligned to your general direction of change must also be briefed. It’s important to recognise the capacity to rotate board members as required. Ensuring strong financial acumen amongst the least one board member is a key golden rule.
3. Discipline and time.
The change process will always take time – likely more than expected. As the change process can be frustrating, time-consuming and require considerable thinking and open discussion, all parties must ‘sign-up’ for this process. Discipline will be needed around strategy, reporting, financials, research, document development, customer review, etc. Having the right people in place at board and management level to support the discipline and time required is crucial.
What about the money?
While there will generally be a cost involved, sometimes philanthropically minded business people, who have a desire to give back to others in the industry, are prepared to contribute to the change process for varied and often reduced fees – particularly if they see real benefit accruing from their involvement.
On the other hand, there may be critical advisers who will need to be paid the going rate – and frequently difficult business issues that arise during the Advisory Board meetings will require considerable time, expertise and effort from all parties. But as always, a good adviser will save or generate more money than they will cost.
As you’re thinking about the change process, or the role of the Advisory Board, here are some thought starters:
- “Building a Better Business – starting with the End-in-Mind”
- “A business plan isn’t worth the hassle… right?”
- “The Enemy of a Great Life – Is a Good Life”
- “3x ways to get everyone in the business on the same page”