Entrepreneurs typically like to think they can do it all. Big mistake. Real business growth hinges on a CEO's willingness to ruthlessly assess his or her skills and then find creative ways to fill in the knowledge gaps. An advisory board can be just the ticket.
So it was for Jo DeMars, the CEO of DeMars Associates, a Waukesha, WI, company that designs and manages dispute-resolution programs for large companies such as eBay and Porsche. "We had grown to the point that there were business-management questions and marketing issues that I didn't know how to approach," DeMars says. "I needed someone else to help chart a course for me." Her advisory board did exactly that for eleven years, helping DeMars with everything from entering new markets to structuring an employee benefits plan. But assembling and managing a board can be challenging. Here are some guidelines:
- Know what you don't know. Be honest about what your business needs and identify specific resource gaps. Among DeMars original advisors: a retired judge with a strong interest in dispute resolution and a retired auto-industry executive who had regulatory experience. The judge helped DeMars attract skilled arbitrators, whom she employs nationwide on a contract basis, and the auto exec gave her industry insight into one of her key markets. "I needed someone who could teach me about the politics of working with large corporations," she says.
- Think values, not just skills. That HR star who's willing to be on your board may be your biggest asset, or a colossal nightmare. You like to work things out with employees; she fires first and asks questions later. Make sure that every advisor you consider, no matter how attractive their talent might seem, is in sync with your values and your company culture. Find your advisors among your current trusted network, or at least through a strong referral from someone you know and trust. Then do a one-on-one interview to make sure you're on the same page when it comes to key issues.
- Be clear about your expectations. DeMars's board met once a quarter and she paid them each $500 a meeting, which typically lasted the better part of a day. She also put her expectations in writing. "They needed to attend at least three out of the four meeting, be punctual, and be available in between meetings if questions came up," she says. Before each meeting, DeMars sent each advisory board member an agenda and pre-meeting materials. "Most took the time to become familiar with the documents and gave us really good advice," she says. (Note: cash-strapped start-ups should try hiring a volunteer advisory board.)
- Make yourself accountable to your board. Hearing advice is one thing and taking it is quite another. But if you don't act upon your advisory board's advice, you're wasting everyone's time. "If you want to reserve the right to accept or reject all suggestions, you just won't get the same level of expertise," DeMars warns. If you receive advice that you find impractical, say so right away so that your board doesn't expect you to act when you have no intention of doing so. Remember, cautions DeMars, "one of the big reasons to have an advisory board is to feel that you are moving agendas forward. It helps you stay accountable."
Helping hands image by Flickr user alasis, CC 2.0