5 Keys to Forming an A-List Advisory Board
To help accelerate and increase the probability of success, owners should seek other industry leaders to support and evangelize their efforts. Enter the advisory board. From ongoing product feedback to investor due diligence, media interviews, customer prospects and more, a strong advisory board can change the course of a company in ways it can’t accomplish through any other method.
For those looking to get a stellar advisory board together, here are five key steps:
1. Target Leaders in Your Industry
The first step to building out an advisory board is determining who should be part of it and why. Focus on the strategic needs of your business. “For example, in IT, the perfect candidate is a Chief Information Officer,” says Margaret Lenihan, Senior Vice President, Cash Management at PeoplesBank. “They’re the ultimate decision maker for strategic IT purchases with a full grasp of both business and technology.”
As your company grows and your product line expands, you might later add a technical advisory board, but initially, focus on the business side and resources who can help you attract customers, media, analysts, partners and investors.
2. Aim for Diversity in Your Advisors
Your business will benefit from having advisors who don’t all have the same skills or shared demographics. “If your board is comprised of people of all the same age, sex, industry background, etc., you are missing a huge opportunity to expand the benefits that advisors bring,” says Shaun Dwyer, First Vice President, Commercial Lending at PeoplesBank. Having diverse advisors will expose you to a wider array of connections and thinking.
"If your board is comprised of people of all the same age, sex, industry background, etc., you are missing a huge opportunity to expand the benefits that advisors bring."
3. Be Clear on Your Expectations
You should know your needs before you go out seeking an advisor. “It could be help with raising capital (through direct contacts or credibility), strategic advice, marketing and PR, product development, business development, sales, or a whole host of other connections and areas,” says Ms. Lenihan. “You just need to know and communicate your expectations.”
Also be wary of just adding names and/or titles. “It can be tempting to add cachet to your company by adding big-name individuals as advisors,” suggests Ms. Lenihan. “However, if these big titles are no help to your business, you have wasted your time and energy.”
"While they may be eager to help you, your advisors most likely have other pressing needs as well. Tap them lightly, strategically and only when you absolutely need to."
4. Ask for Help and Be Responsive
Getting advice is the best way to leverage advisors. “But remember,” says Mr. Dwyer, “they don’t know the daily goings-on in the company, so you need to fill them in and then have specific questions for them.”
Once you ask for assistance, be responsive. “I have heard of too many entrepreneurs who ask for help, then get too busy to respond when the advisor asks for more information,” continues Mr. Dwyer. “Advisors can be helpful, but you need to fulfill your part of the bargain. If you don’t, you will not only lose any potential benefits that can be gained through the advice, but you will earn a bad reputation.”
5. Be Respectful of Their Time
It can be very exciting, as well as quite a relief, to have an advisor or group of advisors to turn to. Yet, you have to temper both your enthusiasm and engagement with this new resource. “Think about the relationship from their perspective,” notes Ms. Lenihan. “While they may be eager to help you, your advisors most likely have other pressing needs as well. Tap them lightly, strategically and only when you absolutely need to.”
If you recruit the right advisory board and leverage them strategically, it can be one of the best investments your business makes. Adds Mr. Dwyer, “Wise companies that have these industry ambassadors have a better chance of raising investment capital, attracting customers and employees, making a big splash when your time is ready, and ultimately jump-starting your success."