Advisory Boards: An Entrepreneur CEO Superpower
Building and leading a successful company is hard. It takes a little bit of a lot of different things. And even different things at different stages. It’s nearly impossible to know it all and even harder to maintain an objective vantage point when engaged in the daily grind.
Those founding journeys can be fascinating and, in my opinion, often fall into two categories. Scarred survival where they started, got blindsided, recovered, fell again, got back up, and kept moving. They learned enough along the way to pivot as needed to survive. The telling of these stories is mixed with surprises and missteps that cost time and money. Among many other factors, luck may have played a disproportionate role in their success. And then there are smooth ride stories. From the outside, these companies seemed to identify and lock in on an opportunity early and then methodically executed their plan. They tapped people who could help shape their ideas and focus their execution. These were stories of leverage not perfection. These entrepreneurs used the mistakes and learning of others to inform their progress.
The difference between the two types of founder stories is not measured in work hours or IQ points but in recognizing what they needed and how to find it.
If I could wish for one attribute for founders or CEOs, it wouldn’t be for them to be smarter or harder-working than anyone else. I’d wish for them to have self-awareness. Why? Running a business would be much more straightforward if each of us could somehow recognize what we’re good at, what we’re not, what we need to learn, how much we can handle, and where to turn to fill the gaps. For many founders, self-awareness comes after the fact…sometimes after a time-consuming and/or expensive humbling experience. Imagine being able to get the benefit of others entrepreneurial experiences, expertise, successes, and even their mistakes without having to go through it on your own. And that’s why advisory boards can bring so much value.
From working with a range of boards: private and public companies, early stage and mature businesses, for-profit and non-profit organizations, I realize that there’s a big difference in just having a board and cultivating an effective one.
An advisory board should be a group of committed partners who lend insight, advice, expertise, and constructive engagement for you and your company. As one founder put it, the board should be “people who will advance your mission.”
Make sense? Ready to start recruiting for your board? Don’t. Not yet, anyway. The first steps toward recruiting an effective board are internal.
Define your hopes and expectations of advisory board. How will the board make a positive impact on you and your company? Why do you want to form a board? How will you respond to feedback from your board? Be specific. Write it down. Define the need first, before the people.
Map out the skills of your team. This exercise should be about illustrating demonstrated competence not resume claims. The composition of your board should complement and extend the expertise of your team.
Develop personas for your board. What type of person would fit the mission, culture, and business? This may sound like a marketing exercise – and it is – but the exercise helps fine tune the search.
Build your case. The people you’re trying to get are probably already busy and have other priorities. Consider what you have to offer them. Why should they help you?
Here the obvious things to look for when assembling an advisory board…
Industry experience – What have they done in the specific or adjacent industries of your venture?
Stage experience – What have they done with organizations going through similar development stages or challenges as your company? Fortune 500 background alone, for example, may not be all that relevant to an early stage company.
Network – How might their contacts or relationships be useful in the future. If fundraising is the main priority for your board then make sure to share that expectation up front with your board prospects.
Operational expertise – Find people with functional experience to complement your team. If the founder group or leadership team is mainly from a sales background then the board should have finance, marketing, or production expertise.
And the less obvious but important personal qualities to consider…
Positive and skeptical – Effective board members believe in the mission of the company. They also ask challenging questions on the strategy, team, and progress. Cheerleaders are OK but you really need people to help you work through issues.
Open minded but focused – Lots of ways to get from one place to another. However, distraction is a big threat to emerging companies. Chasing shiny objects may feel good but it may take away from building something significant.
Execution oriented – Ideas and strategy generate value only through how well they’re executed. Advisors who balance what you’re doing (strategy) with an emphasis on how you’re going to do it (execution) bring a useful pragmatic accountability to the company.
Of course, there are other considerations as you build your advisory board.
Don’t fill it with investors only. Sure, they have a vested interest in your success. Unless they have operational background, they may not be all that helpful in working through non-financial issues.
Don’t fill it with people that have the same background as the founders. The goal should be complementing expertise instead of replicating it.
Don’t fill it with friends. Background and business expertise are more important.
Don’t constrain it to people from your industry. Sometimes an outsider voice can be just what’s needed.
Don’t tap people who aren’t committed to playing an active role. Big names may sound appealing, but they might also be too busy to offer anything more than symbolic help.
Don’t expect people to join your advisory board for free. If your business is important to you then you don’t rely strictly on favors from others. Find ways to make your board worthwhile to members.
Finally, consider the scope of your needs and the time that you have. An advisory board can be valuable in the right circumstances. Even so, an advisor or mentor might be the right place to start. In either case, taking thoughtful steps up front can help ensure you get what you need most.
Mike Irwin is an advisor, blogger, mentor, operator, and strategist. Drawing from his past as a startup co-founder/President, executive officer of a $1+ billion market cap company (WD-40), public company CFO, VP Marketing, global chief strategy officer, head of sales, and board member, Mike helps companies grow sales, improve profitability, and scale up. He serves as an advisor, consultant, fractional or interim CEO/GM/MD, and on boards of directors. He currently serves on the boards of directors of Kitchens For Good and San Diego Sport Innovators. His past board involvement includes the Aztec Athletic Foundation, Aztec Shops, Canyon Crest Academy Foundation, Leukemia Society of San Diego, Voz Sports Inc., WD-40 BIKE, and WD-40 Company. Follow him at BottleRocketAdvisors.com, get in touch at mike@bottlerocketadvisors.com or connect on LinkedIn.