Benefits of Adult Supervision
Advisory boards could hold the key to strategically building your business.
By Diana L. Mirakaj
Anyone who knows me is familiar with some of my catchphrases, most of which I can’t include in a public blog. One, however, is appropriate here: “To be big, you have to think big.” For small to midsize solution providers, that means operating your business in a way that larger organizations do, which might involve engaging successful executives from other companies to act in an advisory role through participation on a board.
For a publicly traded F500 company, there’s no second-guessing this move, but for an SMB, the question that often arises is, “Should we establish a board that includes external members?”
Each case must be considered on its own merits, taking into account factors such as business size and stage of the business lifecycle. In addition, a company has to decide what it hopes to gain from these appointments.
A well-chosen advisory board can help a business owner and management team deal with two major issues: growth and strategic planning.
Advisory boards help put in place the systems and appropriate checks and balances that are so important when dealing with both fast and stalled growth – specifically, moving to the next level of growth. Carefully crafting an advisory board allows you to introduce expertise in important areas such as raising capital, restructuring, identifying new geographic markets, and strategic sales planning to enter those segments.
While difficult at times, by engaging the external – and unbiased – counsel of advisors, business owners often can get brutally honest feedback on whether their personal abilities are adequate for taking a business to the next level. This transparency can help an organization avoid irreparable harm by allowing for the introduction of new team members that complement existing players or supplement recognized deficiencies early on.
By establishing an advisory board and governance structure, you also lay the foundation for continued business maturation, which can be an integral part of succession planning for future generations – or a potential exit strategy, depending on your goals.
An advisory board is only as effective as its members, so choose executives wisely. Because board members provide a business with the guidance and support it needs to move to the next growth stage, you need individuals who bring objective direction and advice to the table, and provide an appropriate level of insight about your business.
Ideally, they should complement the owners’ and management team’s collective industry expertise with their business acumen and experience, while bringing a different perspective that challenges others to think differently. Remember that disruption drives change.
Advisory boards aren’t decision-making entities – that’s still incumbent on an executive team – but being able to brainstorm with vendor executives, or possibly a former VAR who sold his business to a large vendor (and has walked in your shoes), is enormously valuable for a solution provider when it comes to issues related to business development and strategy.
I recently had a conversation with a solution provider who was struggling with transformation issues, and I suggested that he and his partner consider the creation of a board as a private peer network. He liked the idea, but said advisory boards seem like a headache that aren’t worth the effort.
Not worth the effort to improve your business? I have a catchphrase in response to that, too, but it’s another one that’s not appropriate for public sharing.