Take Advice On Board
By Chris Sheedy
Seeking regular business advice from people with exceptional experience is a sure-fire way to fast track the growth and success of your business. Setting up an advisory board is a simple but powerful way to formalise this process.
No matter how intelligent you are and no matter how good at business you think you might be, says marketing guru Siimon Reynolds, you will never be as collectively brilliant as five or six experienced business people who have come together to help drive your organisation.
Great businesses are beginning to trend towards the idea of an ‘advisory board’ - a group of talented experts paid to come in and advise the business on a regular basis, as opposed to a full-scale board of directors and its associated costs and responsibilities.
“There are so many reasons to bring in experts to advise your business,” Reynolds says. “Some people seek regular advice from one or two friends, but friends don’t necessarily tell the truth. An advisory board is objective and is paid to tell the truth. And in order to brief an advisory board on a monthly basis the business owner needs to get things straight in their own head, which is an incredibly valuable process. A great deal of research has shown that when you’re accountable to somebody else, you do the job a lot better.”
Then there’s the inherent power of group functions and processes, Reynolds says. When a set of experts comes together to discuss specific concepts and strategies they spark ideas amongst each other. What could have been a small discussion about a single problem becomes a creative conversation around the solution and the many other opportunities the solution creates. The group then, is greater than the sum of its parts.
“Andrew Carnegie, in his time the richest man in the world, used what he called a ‘Mastermind Group’ which was essentially an advisory board,” Reynolds says. “He said this was one of his most crucial tools in building success. Of course, an advisory board also represents a powerful network, a set of Rolodexs. These people network for you and help promote your business. They connect you with people who can quickly solve specific problems and they enthusiastically tell people around them about the work you’re doing.”
Reynolds is a member of the advisory board for Kylie Hammond’s business, Board Portfolio. Hammond has developed a new service, an Advisory Board Syndicate that is available to businesses. Each member of each three-person advisory team is hand picked by Hammond for the role. The advisory board’s balance of diversity and commercial experience means it can be of enormous value to businesses of all shapes and sizes, Hammond says, from SMEs to ASX-listed organisations.
The benefits of such an advisory board, for SMEs and private companies, at least, include:
- Regular access to the experience and advice of several of Australia’s greatest business leaders.
- Cost is a fraction of that of a full board of directors.
- Despite their broad experience and varying roles, the advisory Board members are paid to know, focus on and advise specifically to your own business.
- Meetings are sharp and focussed as, when advisory board members come in for their regular sessions, information and agendas must be well prepared. This enables better charting and progress checking of your business.
“We’re trying to put together the dream team, if you like, the ideal mix of boardroom talent for an organisation. Then we make it cost effective for a business to be able to access it,” Hammond says. “What’s it worth? It can vary dramatically, but if you’re looking at a day per month or a fee per meeting it can vary from $1000/meeting up to several thousand dollars per meeting. Or you might consider compensating the members with shares in the company. The average rate is about $2000/meeting and there might be six to twelve meetings per annum, with some expenses that might be covered on top of that."
With today’s communications technology, Hammond says, there’s no issue with creating a truly multi-national advisory board. If your business’s reach is beyond Australia’s borders, this could be a game-changing move.
Speaking of game changing, Hammond strongly recommends the inclusion of at least one entrepreneur in the mix. “I have two entrepreneurs on my advisory board,” she says. “These are people who are very experienced at growing businesses rapidly. Entrepreneurs typically enjoy sharing their knowledge."
“Otherwise, look at what skill sets you have within your company then think of what you should bring to the table. If you already have a relationship with legal firms and accounting firms you don’t necessarily need accountants and lawyers on your board. You could have someone with an HR background, a marketing background or an IT background. If you mix resources you get a really compelling mix. You want people to come up with ideas you wouldn’t have come up with yourself.”
Value For All
Advisory boards are not just great for the business owner, they’re also a bonus for the board members themselves. Hammond says there is no shortage of talented potential advisory board members in the market.
“Many senior executives I deal with actually want to avoid some of the fiduciary risks and issues associated with being a non executive director,” she says. “I think you’ll see a substantial trend towards more directors wanting advisory board roles versus non executive directorships in the future.”
And if that’s not all compelling enough, think of the emotional support you’ll receive from your advisory board!
“It’s true,” Reynolds says. “Advisory boards give you an emotional advantage. If things get tough emotionally or in your personal life then the advisory board is a group of people you can trust, and who will always give you objective advice. Being a leader can be very lonely. Often you can’t talk about certain things with your underlings and sometimes, because they’re not part of the business, you can’t talk to your family. Your advisory board is a good place to go for a talk, to ensure everything stays on track within the business as you work things out.”
About Board Portfolio:
Board Portfolio is a world-class Board Consultancy that offers Board Advisory and Board Search services for organisations, and CEO and Board Mentoring for individuals who want to pro-actively manage their board careers.
To enquire about our services please click here.